What is an Acquirer?

An acquirer is an entity that obtains a majority interest in another business. This majority interest arises through an acquisition transaction, where the acquirer pays some form of consideration to the owners of the acquiree in exchange for their ownership interest. This transaction may result in some residual minority ownership of the acquiree by other parties.

An acquirer typically has larger sales and/or headcount than the acquiree, and has access to more financing than the acquiree. This gives it enough organizational heft to successfully complete the acquisition, and enough cash to satisfy the acquiree’s shareholders.

Understanding the Acquirer

An acquirer purchases other businesses for a variety of reasons. The main reason is because it believes it can gain value from the deal. This can be accomplished by acquiring valuable assets of the acquiree, such as its production capacity, skilled employees, or intellectual property. It may be counting on integrating the acquiree’s products into its product line, or to use the acquiree’s distribution network in areas where the acquirer does not currently sell its products.

An acquirer may also buy another business because it wants to deny competitors access to the acquiree. This is a blocking move that does not directly bring value to the acquirer, but will prevent others from more effectively competing with it.