We study the effects on firms that are acquired by private equity firms in a leveraged buyout, using detailed Swedish registry data covering 1998-2022. Acquired firms see a large increase in their debt and debt related variables, but no significant change in productivity. This suggests that, on average, private equity firms target profitable firms and increase their size through the addition of leverage.
Economics Letters
Plundered or Profitably Pumped-up? The Effects of Private Equity Takeover
Journal Article
Reference
Kärnä, Anders and Samantha Myers (2025). “Plundered or Profitably Pumped-up? The Effects of Private Equity Takeover”. Economics Letters 247, 112054. doi.org/10.1016/j.econlet.2024.112054
Kärnä, Anders and Samantha Myers (2025). “Plundered or Profitably Pumped-up? The Effects of Private Equity Takeover”. Economics Letters 247, 112054. doi.org/10.1016/j.econlet.2024.112054
Authors
Anders Kärnä, Samantha Myers