• There are two types of buyers, i) economic buyers that are primarily
interested in generating financial returns through the purchase of
businesses, and ii) premium buyers that recognize the strategic and
financial merits of a transaction, and thus will be inclined to offer premium
value.
• Premium buyers actively seek to acquire businesses, irrespective of size,
that i) will enhance their existing operations, ii) add to or enhance their
product portfolio, iii) allow them to enter new geographic or demographic
markets, iv) expand their customer base and market share and/or v)
diversify risk.
• When assessing the purchase of a business, premium buyers look
beyond intrinsic economic value, and focus on the future strategic and
financial benefits. The potential to accelerate strategic and financial goals
is the driving factor motivating buyers to pay premium prices.