Two Buyers
The strategic and the financial buyer, and why the conventional wisdom about them has been wrong for thirteen years
The thesis
The strategic buyer premium existed from 1992 to 2012, disappeared in 2013, and by 2025 had reversed. Funds paid 10.1 times EBITDA against 8.6 for strategic buyers
What the study establishes
1
The strategic buyer's non-dilution ceiling is 7.1 times without synergies; it does not choose to pay less, it is constrained
2
The 17% higher offer delivers practically the same cash at closing
3
The liquidation preference costs 47 million in expected value and raises the probability of zero from 2% to 23%
Contents
- What the data show
- Synergy and who keeps it
- The payment structure
- The two logics
- The fund's arithmetic
- The strategic buyer's ceiling
- The second bite
- The two offers compared
- The counter-argument
- The decision
- The gaps
- The mandate