Mergers and Acquisitions from A to Z, 3rd Edition

CHAPTER 3

Initiating the Deal: The Buyer’s Perspective

Business strategists often say that it is cheaper to buy a business than to build a business. This approach, together with today’s low interest rates and sellers’ adjusted expectations of valuation, has created a very attractive set of market conditions for cash-rich buyers. Our domestic market has clearly experienced major industry consolidation through acquisitions and rollup strategies. Despite all of the excitement, however, the purchase of an existing business is a complex and challenging task. Buying a company for the right price is both an art and a science. Experienced buyers and their advisors often develop a sixth sense, an instinct, a gut feel for the potential problems and opportunities ...