Research On The Merger Performance Of "PE+Listed Company" Mode

Private equity funds in China will enter the golden period in the following ten years and be in rapid development. At the same time, merger demand will be in the explosive growth, because economic development slowdown, macroeconomic upgrade, economic restructure, industry concentration rise and corporate strategic path gradually transform from endogenous development to extensive expansion in recent years in China. Meanwhile, government provides a lot of policies to support merger, in order to avoid bankruptcy crisis. This will promote the development of merger funds. However, China's current private equity funds is not mature and they have a small scale, the immature management team. Therefore, China's private equity funds based the business mode of holding company is unrealistic, while the business mode of equity participation is created, called "PE+listed company" mode.T&D industrial mergers and acquisitions fund is the first "PE+listed company" mode's merger funds. This mode has become a hot market, and the operation mode is also gradually evolving, the program design is more reasonable and profitable. As of 2014, the number and target size of the industrial funds increase 32 times and 62 times in relation to those in 2011.However, due to the emergence of the "PE+listed company " mode is only four years, the existing research of this mode is about the theory, the motivation and the policy proposal. Therefore, in this paper, using T&D as an example, we will research the acquisition performance of the "PE+listed company " mode for drawing relevant conclusions, and putting forward the relevant policy recommendations.The first chapter is an introduction, which describes the background, significance, structure, the research methods and the innovation of this paper.The second chapter is the literature review. This chapter mainly introduces the related research about acquisition performance and "PE+listed company " mode from foreign literature and domestic literature.The third chapter introduces the motivation and operation pattern of "PE+ listed company " mode, using the case of T&D. This chapter firstly summarizes "PE+listed company " mode's industrial funds market situation in China. The cooperation in the establishment of the fund industry with companies and private equity funds accounts for 6.6% of all the number of listed companies in 2014. Then, the motivation and operation pattern of T&D industrial mergers and acquisitions funds is introduced.The fourth chapter, combined with T&D, research the merger performance of "PE+listed company " mode from the angles of qualitative and quantitative analysis, drawing a series of conclusions on the strategic significance, short-term effect and long-term effect. From strategic significance, "PE+listed company " mode can help listed companies to play their advantages in the capital market, has a synergistic effect, enhance the market concentration and the quality of the staff, etc. So the company's business environment, market position and strategic objective factors are improved. From the point of view of the short-term effect, we use the event study method. "PE+listed company " mode can attract the attention of the market in the short term, resulting in a hot market, resulting in stock price, transaction amount and turnover rate rising. This form a short-term effect. From the point of view of the long-term effect, we use the financial analysis method (factor analysis) and EVA method and come to the conclusion that the merger performance of "PE+listed company " mode is a long-term effect. The performance improvement is not obvious in the industry mergers and acquisitions fund set up in the last 2 years, but from the beginning of the third year, the merger performance begin to play a role and gradually improve the company's the operating condition and the value condition.In the fifth chapter, based on the 22 merger funds of Silicon Valley Heaven company, we verify and analyze the relevant conclusions drawn from the fourth chapter, which makes the conclusions more universal. Through the calculation and analysis of data, it is concluded that the conclusions of the fourth chapter are completely universal, and draws two new conclusions:the strength of short-term effect is relevant to value judgments of investors about "PE+listed company " mode industrial mergers and acquisitions funds, such as cooperation of private equity funds and listed companies, the secondary market activity as a whole, familiar and identify factors of investors about "PE+listed company " mode; merger and acquisition behaviors in the process of integration have greater negative effect for the financial situation than that for the value situation in the first year.In the sixth chapter, the conclusion of this paper is summarized, and suggestions are put forward, and the deficiencies of the research are pointed out. "PE+listed company" mode exists some problems, but the overall merger performance enhance is very obvious. And there are strategic value, short-term effect and long-term effect. For the occurrence of this phenomenon, it is considered in this paper that the company's overall business and management will not be very ideal in the beginning, even lead to decline in the early performance because of interference factors of management mode. But with the deepening of the strategic transformation and the gradual improvement of the industrial chain, it is bound to create a rapid upgrade about operating capacity and company value of the listing company.The research angle of this paper has certain uniqueness and this is the great innovation of this paper. "PE+listed company " mode research theoretical research, motivation analysis, policy recommendations before. However, this paper carry out quantitative research of the acquisition performance of the "PE+ listed company " mode, and draw the relevant conclusions of the strategic significance, short-term effect and long-term effect.Of course, there are some problems to improve. First of all, the relevant market data of "PE+listed company " mode is so little that the analysis accuracy is impacted. Secondly, the correlation coefficient of the factor analysis model is based on China's overall merger and acquisition market, differing from that of "PE+listed company " mode industry mergers and acquisitions fund. With the expansion of industry merger and acquisition funds, we can calculate a more reasonable coefficient factor. Finally, it is maybe more reasonable based on the date when the funds set up about the problem of different accounting year."PE+listed company" mode is a win-win choice for private equity funds and listing company. Although there is some risks, this mode fall in with development direction of financial markets. At the same time, "PE+listed company" mode's industrial mergers and acquisitions funds can promote the company performance and the company value, also improve acquisition performance. As long as "PE+ listed company" mode correctly operate, this mode will occupy more share of merger funds market.