Synergistic Buyer
A company buyer that brings leverage, or synergies, to a transaction 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 should dramatically increase as a result of being 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 risky.
Related Resources
M&A Guide | The 4 Types of Buyers of Businesses
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