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Journal article

Measures of value in acquisitions : family versus nonfamily firms

  • Granata, Darya Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
  • Chirico, Francesco Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
    2010
Published in:
  • Family business review. - Sage. - 2010, vol. 23, no. 4, p. 341-354
Acquisition
family firms’ valuation
acquirers’ perception
matched-pairs methodology
EBIT and EBITDA multiples
English This article sheds light on the valuation of family firms when compared with nonfamily firms as acquisition targets. The authors argue that although the majority of theoretical and empirical research explicitly recognizes the prevalence and superior performance of family firms around the world, acquiring companies tend to regard family firms as unprofessional and inefficient organizations, thus negatively affecting their valuation when compared with nonfamily firm targets. Overall, the authors’ empirical analysis, based on a matched-pairs methodology and use of multiples, shows that acquiring companies favor the stagnation perspective rather than the stewardship perspective and thus pay less (i.e., acquire at a discount) for a family firm target than for a nonfamily firm target.
Language
  • English
Classification
Economics
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https://n2t.net/ark:/12658/srd1318566
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