Journal of Investment and Management

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Rethinking Target’s Private Equity Process in Turnaround Situations

Received: 28 August 2014    Accepted: 10 September 2014    Published: 20 September 2014
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Abstract

Given the increasing role of PE investments in restructuring the trend of acquisitions, its process needs an organizational change in order to cope with crisis situations. Despite several papers have emphasized the important role of PE both in M&A transactions and in turnaround situations no research crosses these two aspects. This paper bridge this gap, proposing a rethinking of the target’s PE Process in turnaround situations creating value for the target and preparing it for the takeover. This purpose is achieved throughout a literature review and the description of a new PE process throughout the paradigmatic case study of the sport company Brown Ltd. Finally corrective actions are implemented. Results show how a turnaround situation needs a new PE process, developed in 3 main phases (crisis analysis, recover and development) through which it creates value for the target. Main limits consist in the application of the new PE process to a single case study and the lack of an empirical support able to generalize it. The findings help identify drawbacks and set an agenda for future work. This new process could be tested also on other industries and firms of different size, providing a practical adaptation of the PE process in crisis situations and adopted by consulting agencies after testing also its effects in the long term.

DOI 10.11648/j.jim.20140303.11
Published in Journal of Investment and Management (Volume 3, Issue 3, June 2014)
Page(s) 42-50
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Private Equity, Acquisitions, Turnaround, Value Creation

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Author Information
  • Department of Management-University of Turin, Turin, Italy

  • Department of Management-University of Turin, Turin, Italy

  • Deloitte Financial Advisory S.r.l., Rome, Italy

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  • APA Style

    Giuseppe Tardivo, Milena Viassone, Marco Vulpiani. (2014). Rethinking Target’s Private Equity Process in Turnaround Situations. Journal of Investment and Management, 3(3), 42-50. https://doi.org/10.11648/j.jim.20140303.11

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    ACS Style

    Giuseppe Tardivo; Milena Viassone; Marco Vulpiani. Rethinking Target’s Private Equity Process in Turnaround Situations. J. Invest. Manag. 2014, 3(3), 42-50. doi: 10.11648/j.jim.20140303.11

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    AMA Style

    Giuseppe Tardivo, Milena Viassone, Marco Vulpiani. Rethinking Target’s Private Equity Process in Turnaround Situations. J Invest Manag. 2014;3(3):42-50. doi: 10.11648/j.jim.20140303.11

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  • @article{10.11648/j.jim.20140303.11,
      author = {Giuseppe Tardivo and Milena Viassone and Marco Vulpiani},
      title = {Rethinking Target’s Private Equity Process in Turnaround Situations},
      journal = {Journal of Investment and Management},
      volume = {3},
      number = {3},
      pages = {42-50},
      doi = {10.11648/j.jim.20140303.11},
      url = {https://doi.org/10.11648/j.jim.20140303.11},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jim.20140303.11},
      abstract = {Given the increasing role of PE investments in restructuring the trend of acquisitions, its process needs an organizational change in order to cope with crisis situations. Despite several papers have emphasized the important role of PE both in M&A transactions and in turnaround situations no research crosses these two aspects. This paper bridge this gap, proposing a rethinking of the target’s PE Process in turnaround situations creating value for the target and preparing it for the takeover. This purpose is achieved throughout a literature review and the description of a new PE process throughout the paradigmatic case study of the sport company Brown Ltd. Finally corrective actions are implemented. Results show how a turnaround situation needs a new PE process, developed in 3 main phases (crisis analysis, recover and development) through which it creates value for the target. Main limits consist in the application of the new PE process to a single case study and the lack of an empirical support able to generalize it. The findings help identify drawbacks and set an agenda for future work. This new process could be tested also on other industries and firms of different size, providing a practical adaptation of the PE process in crisis situations and adopted by consulting agencies after testing also its effects in the long term.},
     year = {2014}
    }
    

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  • TY  - JOUR
    T1  - Rethinking Target’s Private Equity Process in Turnaround Situations
    AU  - Giuseppe Tardivo
    AU  - Milena Viassone
    AU  - Marco Vulpiani
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    N1  - https://doi.org/10.11648/j.jim.20140303.11
    DO  - 10.11648/j.jim.20140303.11
    T2  - Journal of Investment and Management
    JF  - Journal of Investment and Management
    JO  - Journal of Investment and Management
    SP  - 42
    EP  - 50
    PB  - Science Publishing Group
    SN  - 2328-7721
    UR  - https://doi.org/10.11648/j.jim.20140303.11
    AB  - Given the increasing role of PE investments in restructuring the trend of acquisitions, its process needs an organizational change in order to cope with crisis situations. Despite several papers have emphasized the important role of PE both in M&A transactions and in turnaround situations no research crosses these two aspects. This paper bridge this gap, proposing a rethinking of the target’s PE Process in turnaround situations creating value for the target and preparing it for the takeover. This purpose is achieved throughout a literature review and the description of a new PE process throughout the paradigmatic case study of the sport company Brown Ltd. Finally corrective actions are implemented. Results show how a turnaround situation needs a new PE process, developed in 3 main phases (crisis analysis, recover and development) through which it creates value for the target. Main limits consist in the application of the new PE process to a single case study and the lack of an empirical support able to generalize it. The findings help identify drawbacks and set an agenda for future work. This new process could be tested also on other industries and firms of different size, providing a practical adaptation of the PE process in crisis situations and adopted by consulting agencies after testing also its effects in the long term.
    VL  - 3
    IS  - 3
    ER  - 

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