Does going private add value through operating improvements?

Harm Schütt, Brian Ayash

Research output: Contribution to journalArticleScientificpeer-review


Previous studies document a large positive effect of private equity ownership on operating performance between 1980 and 1990 while evidence on the more recent buyout wave is mixed. We revisit the evidence on post-LBO performance and offer an additional explanation for the varied and time-inconsistent results found in the literature: the effect of accounting for LBO transactions and its change over time. Using hand-collected financial statements for 183 U.S. public-to-private LBOs, we illustrate how previously used proxies for operating performance suffer from an accounting, distortion induced by the buyout transaction. We reproduce the results of previous studies. However, once proxies are modified slightly to account for the LBO process, we find no robust evidence of post-buyout improvements in public-to-private LBOs, regardless of the time period of the study.
Original languageEnglish
Pages (from-to)192-215
JournalJournal of Corporate Finance
Publication statusPublished - 2016
Externally publishedYes


  • leveraged buyouts
  • financial analysis
  • private equity


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