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Family firms are of particular importance for many economies. We know little about family firm buyouts and how they are different from non-family firm buyouts. Oliver Ahlers investigates this under-researched topic. After a comprehensive literature review on family firm buyouts, the focus of his book is on the key steps of the investment process such as family firm valuation and negotiations between PE investors and family sellers. Additionally, it is investigated how “soft factors” such as trust, reputation or commitment could play an important role when PE and family firms interact. Throughout the book, differences between family and non-family firm buyouts are highlighted.



1. Introduction

Family firms are of particular significance for the global economy (IFERA, 2003; Anderson & Reeb, 2003; Morck & Yeung, 2003; Astrachan & Shanker, 2003; Klein, 2000). Prior research acknowledges that family firms are considerably different from non-family firms and the source of distinction clearly is the "family" (Sharma, 2004). Although family firms are a heterogeneous group with varying degrees of family influence, differences in size, industry and geography (Chua, Chrisman, Steier et al., 2012; Chrisman, Chua, Pearson et al., 2012; Tsang, 2002), they all face the same challenge sooner or later—to ensure succession, and the survival of the firm as a family-owned entity (Cabrera-Suárez, de Sa"-Pérez, & García-Almeida, 2001).
Oliver Ahlers

2. Research approach

In this chapter, it is explained how the research questions outlined in chapter 1 are addressed theoretically and methodologically in this thesis. Firstly, the theories applied in the subsequent chapters 3–6 are summarized (the theoretical framework). Secondly, the sample used for the quantitative empirical chapters 4, 5, and 6 as well as the data collection process is described. Lastly, statistical techniques to investigate the generated hypotheses are outlined.
Oliver Ahlers

3. Stepping into the buyer’s shoes: Looking at the value of family firms through the eyes of private equity

The quote "Nowadays people know the price of everything and the value of nothing" is attributed to Oscar Wilde. It could have well been spoken by family firm owners who sell their business to private equity (PE) investors. While it is relatively easy to put a price tag on products or services, it creates much more difficulty to do so when pricing a family business. Valuation techniques are used for expressing economic value of the family firm in monetary terms, i.e. establishing a basis for price negotiations (Granata & Chirico, 2010).
Oliver Ahlers

4. Opening the black box: Power in buyout negotiations and the moderating role of private equity specialization

Buyouts are the main investment route for private equity (PE) firms and negotiations are required to reach an agreement with current owners as to how to form a new corporate entity (Meuleman et al., 2009). The negotiation of buyouts is extraordinary complex, given the number of financial, tax, and legal issues which need to be resolved between the negotiating parties (Reed et al., 2007; Cumming & Johan, 2009).
Oliver Ahlers

5. Bargaining power in family firm buyouts: Does family influence make a difference?

With a previous paper we have started to explore the neglected topic of buyout negotiations. This paper aims to refine and to extend our previous findings to the context of family firm buyouts. Management buyouts have to be negotiated between buyer and vendor, which is highly complex in light of financial, tax, and legal issues that require consideration (Reed et al., 2007; Cumming & Johan, 2009).
Oliver Ahlers

6. Seller’s affective deal commitment – Buyout transactions as courtship

Private equity (PE) backed buyouts are often considered a superior form of entrepreneurship, in which PE firms increase efficiency and effectiveness as well as realize strategic growth (Harris, Siegel, & Wright, 2005; Wright et al., 2001; Meuleman et al., 2009). While much of the research in that domain has focused on how successful PE firms and buyouts are performing (Cumming et al., 2007; Boucly et al., 2011; Brown et al., 2009; Cumming et al., 2007; Amess, 2002; Amess, 2003; Gottschalg & Wright, 2008; Cressy et al., 2007; Wilson et al., 2012; Nikoskelainen & Wright, 2007; Cumming et al., 2007; Kaplan & Schoar, 2005)−Arthurs and Busenitz (2003) have called for new theoretical approaches to advance our understanding about the relationship between PE firms and their acquisition targets.
Oliver Ahlers

7. Conclusion

The last chapter of this thesis is structured as follows. Firstly, the main findings of the chapters 3–6 are summarized. Secondly, the theoretical and practical implications of this thesis are presented. Lastly, limitations are acknowledged and opportunities for future research are outlined.
Oliver Ahlers


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