Family Firm Buyouts in Scandinavia: Impacts on Operational Performance

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We analyze the impact of Private Equity sponsored buyouts on the operating performance of family firms in Scandinavia by performing an event study where changes in operating performance among the buyout targets are benchmarked against both carefully selected matching peers and an industry median benchmark. We also test a set of novel hypotheses related to performance and associated variables of interest. Our findings on changes in EBITDA margins and ROIC imply that acquired family firms tend to operationally underperform their respective benchmarks post-buyout. However, we find strong support that M&A activity, financial leverage and employment increase in relative terms post-buyout. Finally we find indications that family firm owners value Private Equity invo...