Creation of the added value at leveraged buyouts

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Journal paper

Russian Journal of Entrepreneurship *
Volume 17, Number 20 (October 2016)
* Этот журнал не выпускается в Первом экономическом издательстве

Citation:

Abstract:
The article studies the effective procedure of the Leveraged Buyout (LBO), the issue that is still not studied enough in the Russian economic literature. The main purposes of the article are the review of aspects for creation of the added value at LBO under conditions of the modern Russian economy, determination of main factors for creation of the added value as well as the wording of methodic recommendations for the analysis of the effectiveness of the corporate financial strategy based on LBO. While reviewing the effect of the leverage, the special attention is paid to the analysis of the mezzanine financing's effect on the weighed average capital cost. The author words out theoretical provisions and conclusions related to the methods of the influence on the rate of the added value created, gives practical recommendations concerning methods to measure it, in particular, based on the developed algorithm for the assessment of the effectiveness of the leveraged buyouts. As a conclusion, recommendations for the further study of the LBO subject are given, taking into account specific features of the Russian market.

Keywords: added value, value creation, value management, Leveraged Buyout, Mergers & Acquisitions efficiency, company financial strategy

JEL-classification: C13, G32, G34

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