دانلود رایگان مقاله انگلیسی شناسایی اهداف M&A و محتوای اطلاعات VC/PE - الزویر 2018

ABSTRACT

The information gap in the M&A market hinders acquirers from effectively identifying high-quality targets. We examine whether VC/PEs convey information content in the M&A market and whether acquirers can use such information to identify high-quality targets. We show that VC/PEs have significant information content and can signal high-quality target companies via ‘‘certifi- cation”. When acquirers lack acquisition experience and targets are located in inferior information environments, VC/PE ‘‘certification” is more significant. The better reputation a VC/PE has, the more information it conveys. Syndicate VC/PEs convey stronger information than independent VC/PEs. We also find that acquirers do not pay higher premiums for high-quality targets. Overall, our results suggest that VC/PEs have value relevance in the M&A market, confirming their ‘‘certification” role. We present means for acquirers to select high-quality targets and investors to build efficient portfolios.

7. Conclusions and implications

Due to the information gap faced by many acquirers in the M&A process, identifying high-quality target firms has become a crucial step in M&A transactions for firms to generate value. In this study, we examine the characteristics of M&A sellers and find that VC/PEs have significant information content in the M&A market. Our specific findings are detailed as follows.

First, VC/PEs have a very significant ‘‘certification” role during M&As. Based on the short-term reactions of the stock market, investors respond positively when bidders acquire VC/PE-backed targets. Second, when acquirers lack M&A experience and targets are located in inferior information environments, bidders face a greater information gap, and the ‘‘certification” role of VC/PEs becomes more prominent. Third, there is a significant difference in the information content due to the heterogeneity of VC/PE features. The higher the reputation of the VC/PE and the more involved it is in the target firm, the stronger its information content. Finally, acquirers do not pay premiums when acquiring high-quality targets, suggesting that the acquisition of VC/PE-backed targets is a ‘‘cheap but fine” transaction.