RT Journal Article
SR Electronic
T1 Prior Relationships and M&A Exit Valuations
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 60
OP 72
DO 10.3905/jpe.2008.702791
VO 11
IS 2
A1 Dave Valliere
A1 Na Ni
A1 Sean Wise
YR 2008
UL https://pm-research.com/content/11/2/60.abstract
AB An empirical investigation was conducted into the effects that prior relationships between buyer and target firm have on the purchase price paid. Forty acquisitions of Canadian and US high-technology firms are examined using a set-theoretic approach (Ragin [2000]) to determine the effects of industry and inter-firm alliances on the price-to-book ratio. We find that specific combinations of prior relationship type are positively associated with higher prices. These results suggest that relationships at different levels of analysis can act to mitigate information asymmetries in a value-creating manner and may provide practitioner guidance on strategies to increase value in M&A exits.TOPICS: Private equity, security analysis and valuation, statistical methods, developed