Secondary Buyouts, Private Equity and Firms' Corporate Governance

During last years numerous studies have focused attention on determinants of leverage buyouts (LBOs), finding strong evidence about the capability of those operations to improve firms’ productivity and operating performance. Nonetheless, there is a lack of research concerning the performance realized by secondary buyouts (SBOs), which are operations where a LBO is refinanced with a new ownership structure that includes a new set of private equity financiers and a new debt structure. By the analysis of a initial dataset of 164 transactions occurred in Italy during the period from 2000 to 2008, we find evidence of SBOs’ rationales of corporate governance, with significant firms’ performance improvements.