How should financial information be presented to a strategic acquirer?
A strategic acquirer is a company that is looking to grow by way of acquisition. Typically a strategic buyer looks to capitalize on the available synergies with the acquired company, such as eliminating duplicated overhead expenses, taking advantage of purchasing discounts and efficiencies of scale, gaining access to new markets, etc. Given the “strategic” nature of their interest, it is strongly recommended that financial information be presented with these potential synergies in mind. For example, it may be anticipated that the two companies will eventually consolidate operations into one facility. It follows that the acquired company’s facility expenses (i.e. rent, real estate taxes, utilities, property maintenance expenses, etc.) will be non-recurring to an acquirer. It is also likely that a host of other expenses would be redundant in a combined entity. These types of expenses should be “recast” and presented to a buyer as redundant expenses that will not exist after closing.
