Employee Views of Leveraged Buy-Out Transactions

ABSTRACT

Employee satisfaction decreases following a company acquisition. This effect is, generally, higher when it is through a Leveraged Buy-Out (LBO), but with considerable heterogeneity: the decrease in employee satisfaction is concentrated in Tech LBOs and in Public-to-Private (PU2PE) transactions. After any M&A transaction, employees complain mostly about cost cutting (including lay-offs). What is unique to post-LBO employee reviews, and especially for Tech and PU2PE LBOs, is the more frequent complaints about management attitude towards employees and the acknowledgement by employees that the company operations and prospects are improved.