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A strategic buyer is an operating company that acquires a target to combine it with an existing business — seeking customers, products, talent, geography or cost synergies — rather than as a financial investment vehicle.
A strategic buyer (also called a trade buyer) is in the same or adjacent industry. The investment thesis is industrial: cross-sell, procurement, overlapping SG&A, technology, licences, or blocking a competitor.
A financial buyer underwrites standalone cash flows plus leverage and an exit. A strategic underwrites standalone cash flows plus synergies — which may justify a higher EV/EBITDA if the synergies are real and the board will own the integration.
Illustration only.
Target: €5.0m EBITDA, clean. PE bid: 8.0x standalone = €40m EV. Strategic manufacturer identifies €1.2m run-rate cost synergies (tax-affected, risk-weighted at 60% in their IC paper → €0.72m). They will pay 8.0x on €5.72m = €45.8m and still show a better EPS story than PE can on 8.0x. If the synergies are political fiction, they overpaid.
The highest strategic bid is not always the best close: antitrust, customer conflict, and “we will keep everyone” promises that die in month four. Certainty of funds can still be worse than a funded financial buyer.
Trade sale processes; defence (white squire); bolt-on programmes.
Not every corporate is strategic for this target. A conglomerate with no overlap is a corporate buyer with financial-buyer economics. Synergy claims belong in a diligence workstream, not in the teaser.
Dazur splits the buyer universe into strategic vs financial with a written overlap thesis per name. Matching without that thesis is spam.