News & Articles

How Synergy Affects Price - Business Valuation

Posted on Wed, Oct 15, 2014

When selling a business, there are some buyers who would be willing to pay a premium above the fair market value of the business on a controlling basis. These strategic (or synergistic) buyers might include competitors looking to build market share, joint venture partners who already understand the business model or players that are vertically integrated along the supply chain. This premium typically is the result of cost-saving or revenue-building synergies that exist between the buying entity and the selling entity.

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Tags: EHTC Article, Synergy, Newsletter, Articles, Business Valuation