Analysis of value creation in a leveraged buyout (LBO) operation in Brazil

Authors

  • Marcelo Mitre Filho Universidade Federal de São Carlos (UFSCar)
  • Andrei Aparecido de Albuquerque Universidade Federal de São Carlos (UFSCar)
  • Michel Augusto Santana da Paixão Universidade de São Paulo (USP)

DOI:

https://doi.org/10.19094/contextus.v15i1.932

Keywords:

Value Creation. Leveraged Buyout. LBO. Private Equity. Economic Value Added.

Abstract

Using a business model based on the acquisition of companies with growth potential, private equity funds have developed acquisition tools that optimize the value of investments for their shareholders through leveraged buyouts (LBOs). This paper aims to verify if there was value creation or destruction in an LBO operation in the Brazilian market. To study this issue, a business acquisition operation using LBO was observed.  The completed operation—from acquisition to divestment—occurred between 2009 and 2013. Economic Value Added (EVA®) was used as the value creation measure. The findings provided inconclusive evidence regarding the destruction of value in a national LBO operation, indicating that other elements may be responsible for the negative EVA® indicator.

Author Biographies

Marcelo Mitre Filho, Universidade Federal de São Carlos (UFSCar)

Bacharel em Engenharia de Produção pela Universidade Federal de São Carlos.

Andrei Aparecido de Albuquerque, Universidade Federal de São Carlos (UFSCar)

Doutor em Administração de Organizações e Mestre em Controladoria e Contabilidade pela USP/FEA-RP. MBA Controladoria e Finanças pela FUNDACE/USP. Bacharel em Ciências Contábeis pela USP/FEA-RP. Docente do Departamentos de Engenharia de Produção da Universidade Federal de São Carlos.

Michel Augusto Santana da Paixão, Universidade de São Paulo (USP)

Doutor e Mestre em Economia Aplicada pela USP/ESALQ. Bacharel em Ciências Econômicas pela UNESP.

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Published

2017-10-02

How to Cite

Mitre Filho, M., Albuquerque, A. A. de, & Paixão, M. A. S. da. (2017). Analysis of value creation in a leveraged buyout (LBO) operation in Brazil. Contextus - Contemporary Journal of Economics and Management, 15(1), 149–171. https://doi.org/10.19094/contextus.v15i1.932

Issue

Vol. 15 No. 1: jan/abr 2017

Section

Articles

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