Why LBO firms can outbid strategic buyers: Importance and presence of factors affecting their competitiveness

Abstract: The aim of this master’s thesis is to identify and discuss the importance and presence of factors affecting an LBO firm’s relative competitiveness and hence ability to outbid strategic buyers. By making use of previous research, the current debate and a survey conducted on the Swedish M&A market, 14 factors have been identified and analysed with regard to their presence and importance in connection to an LBO investment. Value creating factors linked to the holding period have gained most support with management incentives, active ownership and leverage as factors pointed out as most important by the authors.