Business Commons^™

Leveraged Buyouts, Kurt J. Smith

Theses : Honours

This study comprehensively reviews theoretical and empirical literature pertaining to leveraged buyouts. An agency theory framework best describes the source of LBO value creation. Agency conflicts are mitigated through extensive utilisation of debt capital and concentrated equity ownership, which are functions of asset and organisation structures. The evidence generally supports the hypothesis that economic wealth is created by leveraged buyouts, rather than merely redistributed among stakeholders. This thesis uses a multiple case design to examine leveraged buyouts in Australia. It compiles data from a broad range of public and private sources, and conducts qualitative and quantitative analysis on six (6) …