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Measures of value in acquisitions: Family versus non family firms
University of Lugano, Lugano, Switzerland.
Texas A&M University, Mays Business School.ORCID iD: 0000-0002-3742-542X
2010 (English)In: Family Business Review, ISSN 0894-4865, E-ISSN 1741-6248, Vol. 23, no 4, 341-354 p.Article in journal (Refereed) Published
Abstract [en]

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.

Place, publisher, year, edition, pages
2010. Vol. 23, no 4, 341-354 p.
Keyword [en]
acquisition, family firms’ valuation, acquirers’ perception, matched-pairs methodology, EBIT and EBITDA multiples
National Category
Business Administration
URN: urn:nbn:se:hj:diva-17471DOI: 10.1177/0894486510386367OAI: diva2:485777
Available from: 2013-01-15 Created: 2012-01-30 Last updated: 2014-08-07Bibliographically approved

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