Reply To: Do private companies that would like to sell really care for synergies ?


Paul Gray, MBA

Synergies will help determine the premium that a willing buyer is ready to pay for a company. That said, if the seller has an awareness of what the potential synergies are for the respective buyers (since this will be different and unique for each) then it will support in the negotiation process and ensure that the best possible price is realized from the transaction. Understanding the synergies will not be an exact science for the seller because of information asymmetry. However, inferences can be drawn by gaining more information about the buyers and making a determination on the potential synergies which can then be used as leverage in the negotiations.

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