This paper investigates the operating performance of French targets of Leveraged Buy-Out (LBO) transactions during the 1995-2005 period. To benchmark LBO performance, a propensity score methodology is used to find a suitable non-LBO matching pair. The study finds that after the deal, the representative LBO firm exhibits higher operating returns of 4% to 5% relative to its matching control. This finding seems mostly due to increased gross margins, productivity gains, and working capital efficiency gains. These findings are not particular to a certain type of target and are unchanged if the industry of the LBO firm is used as a benchmark.
GASPAR, J.M. (2012). The Performance of French LBO Firms: New Data and New Results. Finance, 33(2), pp. 7-60.