Buyer Active in Today's
Marketplace
The current marketplace for private companies is made up, essentially, of
four types of acquirers. An outline description of each is as follows:
The Strategic Acquirer
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typically a large firm, usually a Public Company
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accustomed to long term planning
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economic considerations are evaluated, however, reason for
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acquisition is not always purely economic.
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acquisition prompted by factors such as establishing new markets.
The Corporate or Sophisticated Acquirer
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typically comes from a large company background
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employs "schooled" approach when determining value
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usually a high net worth individual, a group of individuals, an investor
group, or a small Corporation
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focuses on current and future, rather than past
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places primary emphasis on capitalization of earnings, and on the ability
to finance and leverage a purchase.
The Financial Buyer
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usually an individual
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primary focus on income replacement and the opportunity to build equity
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major emphasis placed on historic and current conditions.
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case for case, the perception of risk is likely to be higher than that of
the strategic or corporate style acquirer.
The Industry Buyer
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usually from within the same, or affiliated, field as the company.
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primary focus is on a business' fixed assets.
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presumes that they will bring virtually all other value to the enterprise.
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