Income Trusts and Growth : Empirical Evidence

This paper provides empirical evidence on the growth, financing activity, and operating performance of Canadian business income trusts. We find that business income trusts are growing in terms of total assets and sales revenues. They frequently acquire other businesses in post-IPO period. We also find that income trusts are likely to issue third-party debt to finance acquisitions. Median operating return on total assets decreases after an business income trust IPO, indicating an operating performance inferior to that in pre-lPO years.