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  • October 1991 (Revised November 1996)
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Gordon Cain and the Sterling Group (A)

By: Michael C. Jensen
  • Format:Print
  • | Pages:25
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Abstract

A Houston-based LBO firm makes two petrochemical acquisitions that benefit from improved industry conditions and improved organizational performance. The LBOs generate huge increases in value, creating problems for managers, who have large, undiversified equity holdings. The firm decides to sell one company after a year, and to take the other company public after two. Allows students to examine the causes of organizational change, the difficulties of managing success in closely held LBO companies, and the relative merits of various exit strategies.

Keywords

Organizational Change and Adaptation; Value Creation; Business Exit or Shutdown; Leveraged Buyouts; Chemical Industry; Houston

Citation

Jensen, Michael C. "Gordon Cain and the Sterling Group (A)." Harvard Business School Case 492-021, October 1991. (Revised November 1996.)
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About The Author

Michael C. Jensen

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More from the Author

    • 2012
    • Faculty Research

    Putting Integrity into Finance: A Purely Positive Approach

    By: Werner Erhard and Michael C. Jensen
    • 2012
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    Author-Level Eigenfactor Metrics: Evaluating the Influence of Authors, Institutions and Countries within the SSRN community

    By: Jevin D. West, Michael C. Jensen, Ralph J. Dandrea, Gregg Gordon and Carl T. Bergstrom
    • 2011
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    Pioneers in Finance: An Interview with Michael C. Jensen - Part 1

    By: Michael C. Jensen and Ralph A. Walkling
More from the Author
  • Putting Integrity into Finance: A Purely Positive Approach By: Werner Erhard and Michael C. Jensen
  • Author-Level Eigenfactor Metrics: Evaluating the Influence of Authors, Institutions and Countries within the SSRN community By: Jevin D. West, Michael C. Jensen, Ralph J. Dandrea, Gregg Gordon and Carl T. Bergstrom
  • Pioneers in Finance: An Interview with Michael C. Jensen - Part 1 By: Michael C. Jensen and Ralph A. Walkling
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