Equity-worthiness and equity-willingness: Key factors in private equity deals

Capasso, Arturo; Faraci, Rosario; Picone, Pasquale Massimo

doi:10.1016/j.bushor.2014.05.006

Cited by 7 publications

(4 citation statements)

References 15 publications

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“…Third, Capasso, Faraci, and Picone (2014) argue that family members' propensity to emphasize family features (such as memories and traditions) is interpreted by private equity as "low equity willingness". At the same time, Chrisman, Chua, De Massis, Frattini, and Wright (2015) find that family businesses typically have a high innovation ability, which might be related to the "ability to store knowledge" over time (Erdogan et al, 2020).…”

Section: New Challenges Of Exploring Emotions Memories and Experiences In Family Firmsmentioning

confidence: 99%

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

Humphrey

Massis

Picone

et al. 2021

Family Business Review

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Exploring the psychological foundations of management in family firms is necessary to understand why they formulate and implement strategies differently from nonfamily firms, and why and how family firm behavior varies across different family firms. Picone et al. (2021. The psychological foundations of management in family firms: Values, biases, and heuristics. Family Business Review, 34(1), 12-32) have proposed a conceptual framework for the psychological foundations of management in family business, examining how the values, biases, and heuristics of family firm members affect strategic decision-making and family firm outcomes. Drawing on this framework, we examine emotions, memories, and experiences in family firms, disentangling “what we know” from “what we should know”, and offering some relevant questions to advance the field.

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Section: New Challenges Of Exploring Emotions Memories and Experiences In Family Firmsmentioning

confidence: 99%

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

Humphrey

Massis

Picone

et al. 2021

Family Business Review

Self Cite

View full text Add to dashboard Cite

show abstract

“…Third, we add to prior studies on value creation and returns in B&B strategies (Acharya et al, 2013; sell, and if it is contested, i.e., it has viable alternatives to walk away from the deal. Capasso et al (2014) provide a framework for deal closure in the PE landscape. They argue that both target's equity-worthiness and equity-willingness are important to closing the deal.…”

Section: Introductionmentioning

confidence: 99%

Pricing and value creation in private equity-backed buy-and-build strategies

Hammer

Marcotty-Dehm

Schweizer

et al. 2022

Journal of Corporate Finance

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“…Finally, given that the family's wealth closely depends on the family business, family blockholders are highly risk averse. Differently, private equity funds look for high‐performing investments that may ultimately allow them to generate soaring dividends and, more importantly, to capitalize gains from trading their stake out in 3 to 5 years from the time of their initial investment (Capasso, Faraci, & Picone, ; Zacharakis & Meyer, ). Accordingly, they usually have a shorter time horizon than family blockholders.…”

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confidence: 99%

Unveiling the role of multiple blockholders: Evidence from closely held firms

Russino

Picone

Dagnino

2019

Corporate Governance

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Research Question/Issue: This paper disentangles how the modes of ownership distribution among multiple blockholders and their heterogeneity shape principalprincipal conflicts and, in turn, affect firm performance. The paper offers empirical evidence from a panel of Italian closely held firms over the period 2009-2014. Research Findings/Insights:We explore the principal-principal conflicts among blockholders across two distinct control structures. When a single blockholder controls the firm, principal-principal conflicts are shaped by the trade-off between the alignment effect and the monitoring effect. In this scenario, we find that the relationship between the two largest blockholders' ownership concentration and firm performance is U-shaped. Furthermore, we show that heterogeneity across the two largest blockholder types has a negative effect on performance. In the absence of a controlling blockholder, firm control is usually obtained by forming coalitions, and principalprincipal conflicts involve the blockholders inside the controlling coalition and the other shareholders. We find that the ownership distribution and heterogeneity across blockholder types are negatively related to the size of controlling coalitions, and in turn, the size of controlling coalitions is positively correlated with firm performance.Theoretical/Academic Implications: We contribute to the principal-principal segment of agency theory by showing that the presence of a controlling blockholder is a key variable that alters the relationship between blockholders' ownership concentration and corporate performance, as well as the relationship between heterogeneity across the largest blockholders and firm performance.Practitioner/Policy Implications: Our findings across control structures in which multiple blockholders are present suggest that blockholders take different roles depending on the control structure in which they are involved. The implications of these findings relate to the design of the ownership structure of a firm.

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Equity-worthiness and equity-willingness: Key factors in private equity deals

Cited by 7 publications

References 15 publications

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

Pricing and value creation in private equity-backed buy-and-build strategies

Unveiling the role of multiple blockholders: Evidence from closely held firms

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