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===Dataset Processing Notes===
#The data was imported into Postgres. There were 41,572 records
#The flag variables were reviewed for variation - some had no bite (e.g. Spinoff, TwoStepSpinOff, and Splitoff) and were ignored. Others led to data being discarded as flag exclusions.
#All variables were checked for coding, range, dispersion, etc. The following were of particular note:
#Restriction were placed on the data (Completion, flags, exclude LBOs) etc. This reduced the data to 40,035 observations
#Certain variables were reprocessed (see below)
#Acquiror and Target names were keyed to account for repetitions etc.
#Duplicate acquisition data (same event) was eliminated
#Multiple acquisition of the same target (i.e. a target is acquired, spun-off and acquired again, etc) were eliminated.
#CUSIPs were processed into 6, 8, and 9 digit variables, by search COMPUSTAT annual data (Jan 1978 - Jan 2012) using the 6 digit CUSIP and then finding the correct 9 digit CUSIP for a particular issue-year. Note that a 9 digit CUSIP is a 6 digit Issuer Number, a 2 digit Issue Number, and a check digit. There were 27,401 acquisitions with 7,348 valid CUSIPs.
#CRSP data was retrieved and processed (see below). After processing we had data for 23,802 observations.
#COMPUSTAT data was retrieved and processed (see below)
#VC PortCo data was retrieved and processed. PortCos were flagged and portco data added for appropriate observations.
#LBO data was retrieved and processed. 164 observations were discarded.
#Acquisition Histories were calculated as number of past acquisitions for each acquirer: Total, VC only, Non-VC only
#Accounting vars were converted to 2011 real values using the official BEA implicit GDP price deflator index: http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=13&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1978&LastYear=2010&3Place=N&Update=Update&JavaBox=no)
#Percentage variables were multiplied by 100 to get nice coefficients
#Every observation was assigned a unique observation number (obsno)
#Compound variables such as ''horiz'',''vert'', and ''cong'' were calculated.
Variable check notes:
*1,514 had estimated announce dates. These were flagged.
*443 had their transaction value amended. These were flagged.
*41,473 had a deal code of 'C' for completed. These were kept.
*The number of bidders was always disclosed and 2 in 54 cases and 3 in 2 cases.
*Number of considerations offered and sought varied from 1 to 8
*State codes were USPS official standards: https://www.usps.com/send/official-abbreviations.htm
*There was data from 35 stock exchanges. 32,177 observations recorded Amex, Nasdaq or NYSE.
*25 acquirors were LBO firms and 3 targets were LBOs These were excluded.
*All acquirors and targets had 6 digit NAIC codes, though some were truncated e.g. 517000 and others invalid. COMPUSTAT NAIC codes were used when SDC NAIC codes failed when these were recorded in WRDS.
Flag Exclusions:
*Cases where the target was bankrupt or distressed as indicated by: TargetBankrupt, TargetBankInsolvent, Liquidation, Restructuring.
*Cases where the form wasn't genuinely privately-held as indicated by: OpenMarketPurchases, GovOwnedInvolvement, JointVenture, Privatization (which capture government sales).
*Cases where there was a share recap going on concurrently with the acquisition: Recap
*Targets that had LBO involvement (more will likely be removed in the next phase of matching to LBO targets): LBO, SecondaryBuyoutFlag, ReverseTakeOver (used for LBO'd firms doing a reverse take over), IPOFlag (likewise).
*Firms where the deal began as a rumor (so the information leakage is problematic): DealBeganAsRumor
Processing of variables:
*The original announce date was determined as min{announcedate, announcedateorg}. Those where annoucedate \ne announcedateorg were flagged.
*Percentage stock, cash, other and unknown were reprocessed to include data from the ConsidStruct field, which tags Stock Only, Cash Only, etc.
*State codes were reprocessed to numerics using the lookup table below
*IT, BT (Biotech), HT (Hightech) and NAIC1, NAIC2, NAIC3, Indu1, Indu2, Indu3 variables were created using the lookup tables below (see the variable descriptions for more info). Note that the IT, BT and HT variables were coding using aggregate codes whereever possible (i.e. 517110, etc, all appear in IT and cover the 517 code entirely, so the 517 block would be coded as IT even if SDC recorded the code as 517000.
no edit summary
The paper required a complete rebuild of all the results, with the data updated to the end of 2011. We can also consider several extensions to the paper, detailed in a later section.
===Dataset Processing Notes===
#The acquisitions data was retrieved from SDC (see below) and imported into Postgres. There were 41,572 records.
#The flag variables were reviewed for variation - some had no bite (e.g. Spinoff, TwoStepSpinOff, and Splitoff) and were ignored. Others led to data being discarded as flag exclusions.
#All variables were checked for coding, range, dispersion, etc.
#Restriction were placed on the data (Completion, flags, exclude LBOs) etc. This reduced the data to 40,035 observations
#Certain variables were reprocessed, e.g. Percentage Shares, NAIC codes, etc. (see below)
#Acquiror and Target names were keyed to account for repetitions etc.
#Duplicate acquisition data (same event) was eliminated
#Multiple acquisition of the same target (i.e. a target is acquired, spun-off and acquired again, etc) were eliminated.
#CUSIPs were processed into 6, 8, and 9 digit variables, by searching COMPUSTAT annual data (Jan 1978 - Jan 2012) using the 6 digit CUSIP and then finding the correct 9 digit CUSIP for a particular issue-year. Note that a 9 digit CUSIP is a 6 digit Issuer Number, a 2 digit Issue Number, and a check digit. CRSP uses 8 digit Cusips. There were 27,401 acquisitions with 7,348 valid CUSIPs.
#CRSP data was retrieved and processed (see below). After processing we had data for 23,802 observations.
#COMPUSTAT data was retrieved and processed (see below)
#VC PortCo data was retrieved and processed. PortCos were flagged and portco data added for appropriate observations.
#LBO data was retrieved and processed. 164 observations were discarded.
#Acquisition Histories were calculated as number of past acquisitions for each acquirer: Total, VC only, Non-VC only
#Accounting vars were converted to 2011 real values using the official BEA implicit GDP price deflator index: http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=13&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1978&LastYear=2010&3Place=N&Update=Update&JavaBox=no)
#Percentage variables were multiplied by 100 to get nice coefficients
#Every observation was assigned a unique observation number (obsno)
#Compound variables such as ''horiz'',''vert'', and ''cong'' were calculated.
Variable check notes:
*1,514 had estimated announce dates. These were flagged.
*443 had their transaction value amended. These were flagged.
*41,473 had a deal code of 'C' for completed. These were kept.
*The number of bidders was always disclosed and 2 in 54 cases and 3 in 2 cases.
*Number of considerations offered and sought varied from 1 to 8
*State codes were USPS official standards: https://www.usps.com/send/official-abbreviations.htm
*There was data from 35 stock exchanges. 32,177 observations recorded Amex, Nasdaq or NYSE.
*25 acquirors were LBO firms and 3 targets were LBOs These were excluded.
*All acquirors and targets had 6 digit NAIC codes, though some were truncated e.g. 517000 and others invalid. COMPUSTAT NAIC codes were used when SDC NAIC codes failed when these were recorded in WRDS.
Flag Exclusions:
*Cases where the target was bankrupt or distressed as indicated by: TargetBankrupt, TargetBankInsolvent, Liquidation, Restructuring.
*Cases where the form wasn't genuinely privately-held as indicated by: OpenMarketPurchases, GovOwnedInvolvement, JointVenture, Privatization (which capture government sales).
*Cases where there was a share recap going on concurrently with the acquisition: Recap
*Targets that had LBO involvement (more will likely be removed in the next phase of matching to LBO targets): LBO, SecondaryBuyoutFlag, ReverseTakeOver (used for LBO'd firms doing a reverse take over), IPOFlag (likewise).
*Firms where the deal began as a rumor (so the information leakage is problematic): DealBeganAsRumor
Processing of variables:
*The original announce date was determined as min{announcedate, announcedateorg}. Those where annoucedate \ne announcedateorg were flagged.
*Percentage stock, cash, other and unknown were reprocessed to include data from the ConsidStruct field, which tags Stock Only, Cash Only, etc.
*State codes were reprocessed to numerics using the lookup table below
*IT, BT (Biotech), HT (Hightech) and NAIC1, NAIC2, NAIC3, Indu1, Indu2, Indu3 variables were created using the lookup tables below (see the variable descriptions for more info). Note that the IT, BT and HT variables were coding using aggregate codes whereever possible (i.e. 517110, etc, all appear in IT and cover the 517 code entirely, so the 517 block would be coded as IT even if SDC recorded the code as 517000.
===Acquisitions Data===
*Target is a Leveraged Buyout Firm
*And many others. These will be reviewed and excluded.
Other Notes:
