Why Do Firms Use Private Equity to Opt Out of Public Markets?

• 成果类型: Article
• 署名作者: Bharath, Sreedhar T.; Dittmar, Amy K.
• 署名单位: University of Michigan System; University of Michigan
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhq016
• 发表日期: 2010
• 页码: 1771
• 关键词: free cash flow; management buyouts; stock returns; financial constraints; operating performance; Ownership structure; cross-section; DECISION; COSTS; IPO

摘要

We investigate how firms weigh the costs and benefits of being public in the decision to opt out of the public market and go private. We draw on previous studies of going private and on the subsequent well-developed theoretical literature on why firms go public to develop our hypotheses. We employ a comprehensive sample of going-private transactions from 1980 to 2004 in the United States and examine how these firms differ over their public life (from IPO to going private) relative to a sample of firms that went and remained public. Our results provide strong support for the importance of information and liquidity considerations in being a public firm. These factors are evident at the IPO, on average thirteen years before the going-private decision. Access to capital and control considerations become increasingly important in the choice of going private over the public life of the firm.