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