Organizational Restructuring And Economic Performance In Leveraged Buyouts: An Ex Post Study

Abstract

This article reports the results of an ex post study of the effects of leveraged buyouts (LBOs) upon the goals, strategy, structure, and performance of firms. Our study was designed to test arguments that can be logically derived from agency theory. We used a survey to collect data on pre- and post LBO goals, strategy, structure, and productivity for a sample of 214 firms that underwent buyouts between 1986 and 1989. Our results do not enable us to reject hypotheses based upon agency theory.