There are different types of buyers in it acquisition country. One is the strategic buyer.
Below you can read what a strategic buyer is, what the reasons are for a strategic purchase, and what the difference is with other types of buyers.
Meaning strategic buyer
A strategic buyer is a company in the same corner as your company. This buyer wants you take over a company because it fits into his or her company's strategy. Usually, strategic buyers are larger than the company they are targeting.
Strategic buyers often have a lot of money in their pocket and getting financing is usually not a problem.
Reasons for a strategic purchase
A strategic buyer may have their eye on your company for various reasons. Usually it concerns synergy benefits. That means that the two parties combined can achieve more than the two separate parties put together. In other words: together you achieve more.
By buying your company, the strategic buyer can, for example, more easily expand to international markets, strengthen its market position or lower production rates.
A company that wants to buy your company for strategic reasons is often willing to pay quite a bit of money: even more the actual business value. This is because the synergy benefits are additional – the strategic buyer is prepared to pay extra for this.
Difference between strategic buyer and other buyers
In addition to the strategic buyer, you also have the financial buyer. The financial buyer wants to get as much return as possible from his investment dream exit to be able to make. This buyer works hard to maximize profits, but usually doesn't have enough financial resources to pay all at once. Therefore, the payment is usually spread over a longer period.
You can also sell your company to an external experienced manager. We call this one Management Buy In. In this case, the buyer will also manage the company. Finally, you can choose to sell your business to your current manager or management team. That's one Management Buy Out. The current management then also becomes the owner of the company.