Three contributions to the empirical literature on the effects of private equity ownership on target firms

Over recent decades, private equity (PE) has expanded sharply and become a central actor in corporate acquisitions. Its core transaction type, the Leveraged Buyout (LBO), has grown in frequency and scale, and PE ownership now extends into industries with direct relevance for everyday life. This dissertation provides portfolio-company-level evidence on how two key features of the LBO model (overpayment and high debt) materialize in practice and assesses whether the resulting outcomes are more consistent with the industry’s value-creation narrative or with risk shifting and value transfers among the different parties involved. Focusing on Spain, the dissertation examines whether a continental European setting exhibits patterns of LBO aggressiveness comparable to those documented in the United States, where the model originated. Chapter 1 tests whether PE-backed acquisitions exhibit higher overpayment than comparable strategic acquisitions. Using the excess-goodwill proxy for overpayment and a hand-collected sample of Spanish buyouts matched to strategic deals, the results show that PEbacked buyouts display significantly higher excess goodwill, with transaction size emerging as a key mechanism consistent with incentives linked to deal volume and purchasing power. Chapter 2 studies the reasons behind the high use of debt and evaluates its role at the portfoliocompany level. Using a control sample, the results show that high leverage is negatively associated with post-buyout value-creation proxies, while being positively related to nonperformance pay-out channels (special dividends and fees and expenses charged to the target company). It suggests that debt can facilitate liquidity extraction even when portfolio-company performance deteriorates. Such debt also includes conflictive instruments such as participatory loans. Chapter 3 shifts the portfolio-company perspective to sector-level implications in a scenario that mirrors the Anglo-Saxon tendency of PE firms toward concentration: the Spanish care home industry. Linking firm accounts with ownership complexity, public funding exposure, and care-home outcomes, the results show that large complex chains (PE owned mostly) exhibit weaker economic performance—especially when publicly funded—and poorer social outcomes. Together, the three chapters provide an accounting-based assessment of LBO aggressiveness in Spain and clarify how entry prices, leverage and ownership structures transmit incentives and risks into firm behaviour and stakeholder-relevant outcomes.