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Strategic buyer General

Definition

Description of a potential acquirer that operates in the same business or industry of the targeted company.

Comments

Strategic buyers are most often approached first by investment bankers given the inherent industry knowledge already in place. Strategic buyers also typically can afford to pay more than a financial buyer given potential synergies and available cost reductions.

Private equity firms can be considered strategic buyers if a current portfolio company serves as the acquisition vehicle.

Referring Terms

Non-core/Non-strategic, Exit strategy, Confidential information memorandum (CIM), Financial buyer

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