The performance of acquisitions of founder CEO firms: The effect of founder firm premium
研究收购创始人CEO企业时，创始人企业溢价与创始人离职风险如何影响收购方市场表现，为收购方评估此类交易提供参考。
Abstract Research Summary We study the market performance of acquirers of targets that are public founder CEO firms. Using a switching regression model, we first estimate the unique value embedded in these targets due to founder presence, which we term “Founder Firm Premium.” We find Founder Firm Premium was positively associated with founder CEO departure ex‐post, and was negatively associated with acquirer abnormal returns. Our results suggest that the while acquirers pay for founder human capital upfront, they may not necessarily appropriate the associated value ex‐post, and that this uncertainty significantly influences acquisition performance. Additionally we illustrate the tradeoffs involved in founder CEO acquisitions, while drawing attention to the need for differentiating between professional and entrepreneurial human capital in acquisitions. Managerial Summary What risks do acquirers face when buying targets that are founder CEO firms? Founder CEO firms provide access to the human capital of founders and the distinctive organizations these individuals have built over time. However, founder CEOs are also difficult to retain, making it challenging for acquirers to capture the unique value and the associated premium embedded in these firms. We show that founder retention risks play a central role and can result in investors discounting these acquisitions. However, we also find that the non‐founder resources these firms possess in various functional areas can be an important source of value creation in these transactions. Acquirers thus need to be aware of these tradeoffs, while integrating founder CEO firms differently from professional CEO firms.