When Management Leads Down the Buyout Path

The list of this year’s management-led buyouts keeps getting longer. Two of the largest targets have included HCA and Kinder Morgan, but several other companies, such as Aramark, NCO Group and Emmis Communications, have also helped to extend the trend.

In some ways, management’s participation in a take-private deal is a positive sign. It suggests that top executives, who are presumably in a good position to gauge a company’s prospects, see the publicly traded business as undervalued.

From the perspective of the public shareholders, however, a management-backed takeover often means leaving money on the table — or, at least, that is what recent data suggest.