Strategic Buyer

Strategic buyers look for acquisitions that will strengthen their existing business. They might seek to expand their market share, enter new markets, acquire new products or technologies, gain talented employees or achieve cost savings by combining operations.

Because they can often achieve synergies, such as eliminating duplicate costs or selling more products to a combined customer base, strategic buyers may be able to pay higher prices than buyers who would run the business on its own.

For example, a large software company might acquire a smaller rival with complementary products, expecting to sell those products to its existing customers and reduce overlapping costs.

Strategic buyers usually plan to keep the acquired business for the long term and often integrate it into their own operations, which can mean changes in management, systems, brands and staffing.

For sellers, strategic buyers can offer attractive prices, but the deal may take longer, involve more scrutiny from competition authorities and lead to greater changes for employees. Strategic buyers are often contrasted with financial buyers, such as private equity firms.