Definition: A company buyer that brings leverage (synergy) to the deal through increased revenues or decreased costs that result from the pooling of two companies’ strengths.

Example: Apple is a synergistic buyer of Beats headphones. By purchasing Beats, Apple can sell the headphones in its online store and in all retail Apple stores. As a result, the revenue of Beats would dramatically increase after it is purchased by Apple.

Tips: Synergies normally result in increased revenue or decreased costs. Buyers of companies share the amount of the synergies with sellers of a business based on the probability of receiving them. Increased revenues are riskier to a buyer and therefore share less of these synergies with sellers of a business than those resulting from a decrease in costs, which is less riskier.