This paper provides the empirical analysis of leverage and pricing of leveraged buyout (LBO) transactions. We collected sample data of 87 deals that were completed over the period of 1995 to 2013 in United States and Canada. We analysed the LBOs patterns based on industry, geography and time period using key financial multiples reflecting leverage and pricing ratios. We further matched firms following LBOs with comparable public companies as well as pre-buyout position and draw results using regression analysis. Based on the empirical analysis of our sample, the results show that the capital structure of the leverage buyouts is not driven by industry characteristics but there could be links between leverage and pricing of deals based on market-wide factors and fund managers’ behaviours.
MSc in Finance Project-Simon Fraser University
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