Series 79: Determining The Buyer’s Strategy

Determining the Buyer’s Strategy

As an initial matter, a buy-side advisor must determine why the buyer is interested in an acquisition or merger. Presumably the answer has something to do with enhancing shareholder value, but it is vital to understand the buyer’s strategy—or what the buyer believes its strategy to be, which is not always the same thing.

In broad terms, potential buyers fall into two categories: financial buyers and strategic buyers. Financial buyers, which are typically private equity in