WHAT IS THE MAIN STRATEGIC REASONING FOR ACQUIRERS OF A BUSINESS? Acquirers do not buy the past performance of business. They buy the future performance of the business, but use the past performance as a guide (along with other things) to establish the likelihood of the future profits. Acquirers can have diverse motivations: ego or status a carefully thought out strategy opportunistic reasons, e.g. see a competitor of failing business up for sale and think a good deal may be had by acquiring it a Seller (or the Seller’s Advisor) has managed to paint a vision for the Acquirer of what the end result will look like of the two businesses once they have been merged. The case will appear convincing, such that the Acquirer will believe that, by acquiring, he or she will be able to generate a value significantly greater and faster than the alternative of continuing organic growth. Whatever the starting point, once an Acquirer is “in play” and considering an acquisition, then it is the … [Read more...]