Graduation Year

Spring 2013

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Henrik Cronqvist

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Rights Information

© 2013 Blake A. Morell


Using 196 reverse leveraged buyout (RLBO) transactions between 1981 and 2006, I examine the operational benefits to leveraged buyouts (LBO). Operational drivers of firm value are defined as: increases in gross profits, operating income, return on assets, net income, working capital management, and cash flow generation. Initial analysis supports the literature of minimal deterioration of post-IPO performance. Where most studies analyze RLBOs as a whole, I find that when broken into top and bottom performance group pre-IPO, data show performance increases for bottom performers and performance decreases for top performers. Top performing firms pre-IPO lose up to 50% of industry adjusted performance by five years after going public, consistent with the hypothesis that LBO structures increase efficiency.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.