What defines a strategic buyer?

A strategic buyer is typically characterized by its goal of acquiring another company to leverage synergies that enhance its operational capabilities. This involves purchasing a business not just to gain financial assets but to create value through improved efficiencies, market reach, cost reduction, or enhanced product offerings. For example, a strategic buyer might seek to combine resources, share technology, or integrate supply chains to boost competitiveness in the marketplace.

This approach contrasts with other types of buyers, such as financial buyers, who may focus primarily on the financial metrics of a deal without necessarily aligning the operational aspects of the two entities. Understanding operational synergies highlights why a strategic buyer is focused on long-term growth and integration rather than immediate financial gains or asset flipping.