The Operating Performance of Private Equity Buyouts in Sweden – A study of Value Creation

Sammanfattning

This thesis examines changes in operating performance among a sample of 59 buyouts on Swedish firms, spanning the period from 2010 to the second half of 2023. Using an industry-adjusted eventstudy methodology, the study evaluates changes in operating performance from entry to exit, focusing on EBITDA margin, Sales growth, and Return on Invested Capital (ROIC). The findings reveal a statistically significant outperformance in both sales growth and profitability compared to industry peers. Specifically, portfolio companies achieved a mean industry-adjusted Sales growth of 9.56% and an EBITDA margin improvement of 3.72%. Notably, while raw data indicated a decline in ROIC, peer-adjusted analysis showed this trend aligns with broader market movements, rendering the PE-specific impact on capital efficiency statistically insignificant. Multivariate regression analysis identifies labor productivity and strategic wage stabilization as the primary drivers of this outperformance. The results demonstrate a significant negative relationship between relative wage changes and operating improvements, suggesting an "efficiency-led scaling" model. Furthermore, labor productivity exhibits a significant positive impact on sales growth. In contrast to earlier "first-generation" buyouts, traditional levers such as leverage, working capital management, and CEO turnover were statistically insignificant. These findings suggest a transition toward an "operational era" of private equity, where value is derived from fundamental top-line expansion and acquiring market share, rather than financial engineering or aggressive governance shocks.