Synthesis and Outlook

Abstract

Since the emergence of leveraged buyouts as a new form of organization with enhanced incentives and monitoring, researchers have questioned how sustainable any performance improvement is and whether any increase in value purely is a wealth transfer to the disadvantage of other parties involved. Post-exit performance depends on the new management structure of the former buyout. The motives and efforts of parties involved - managers, employees, and owners – depends on their share of benefits related to the company and the individual utility function. The interesting question, therefore, was whether changes at the exit are a return to the pre-LBO structure or the birth of a significantly different governance structure allowing post-LBO superior performance. The author has investigated the changes in governance, strategy, operations and performance after the exit from a leveraged buyout structure based on three case studies in Germany. This concluding chapter summarizes the insights that can be drawn from the preceding analysis.