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Claudia Zeisberger

Senior Affiliate Professor of Entrepreneurship and Family Enterprise

Keywords

Private Equity; Strategic Investors; M&A; Due Diligence; Deal Sourcing; Deal Valuation; Investment Process; Value Creation; Transformational Leadership Development Programs: Creating Long-term Sustainable Change; Corporate Governance; Investors, Stakeholders and Accountability; Corporate Governance; Value Creation, Strategy and Implementation; GPEI; GPEI-Publication;

Working Paper

Strategic Buyers vs. Private Equity Buyers in an Investment Process

Authors: Vild J., Zeisberger C.

Vild J., Zeisberger C. (2014). Strategic Buyers vs. Private Equity Buyers in an Investment Process. 2014/39/DSC/EFE

Strategic Buyers vs. Private Equity Buyers in an Investment Process This paper compares the position of strategic buyers and private equity buyers in a typical investment process, from fundraising/sourcing of equity capital, through deal sourcing, due diligence, valuation and deal financing, deal negotiation and transaction execution, to value creation post-closing and exit/long-term plans.

The paper evaluates advantages and disadvantages of the two different types of buyers within each of the phases of an investment process, and suggests that the financial discipline, flexibility, focus, and incentives structure of private equity firms often provide them with an edge over strategic buyers.

Rather than being a rigorous academic study, the paper is intended to help M&A practitioners, whether on the strategic buyer or private equity side, with understanding their “opponent”.

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