Strategic buyout


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Strategic buyout

Acquisition of another firm in order to realize some operational benefits which will result in increased earnings.

Strategic Buyout

The purchase of one company by another where the buyer believes that the acquisition will create synergy, which is a financial benefit that the buyer may derive from the acquisition. For example, the buyer may determine that the two companies together may be able to produce more revenue than either one could produce independently by combining the most efficient processes each brings to the merger. Alternatively he may decide that the strategic buyout will reduce expenses by eliminating or streamlining redundant processes. The main point of a strategic buyout is to ensure the acquirer benefits, though the purchased company often benefits as well.
References in periodicals archive ?
Thanks to the growing competition, the market is likely to witness many strategic buyouts of such technology solution companies by online travel agencies over the next few years.
Axial Vector Energy Corporation (Avec) said its wholly-owned subsidiary Avec Strategic Acquisitions Corporation will aim for strategic buyouts and help boost the company's revenue.
There will be opportunities for nontech companies as well--especially those looking for strategic buyouts. For example, former Procter & Gamble advertising executive Boss Love was able to obtain as much as $60 million over the past five years from such firms as Quetzal/J.P.
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