q1, what is the difference between strategic buyer and financial buyer? why all use normalized executive compensation? I thought excecutive compensation could be dropped for one of the buyer becauese somehow senior management will get replaced… but why drup the reduction of duplicate G&A expense? Thanks.
Strategic buyers expect to realize synergies from the purchase, which are a benefit. This will be shown as either a reduction in costs and/or an increase in revenues. Financial buyers do not realize synergies. In both cases executive compensation is normalized because when the company is acquired the compensation will be altered to market levels. This may or may not involve the replacement of senior management. I’m not sure what you’re asking in your last question. I’m guessing that you are referring to synergies again?
this answered all my questions. Thanks. Did you actually read through all the content? I mainly go through text book questions, sometimes I am not sure if it is a doable strategy… grumble Wrote: ------------------------------------------------------- > Strategic buyers expect to realize synergies from > the purchase, which are a benefit. This will be > shown as either a reduction in costs and/or an > increase in revenues. > > Financial buyers do not realize synergies. > > In both cases executive compensation is normalized > because when the company is acquired the > compensation will be altered to market levels. > This may or may not involve the replacement of > senior management. > > I’m not sure what you’re asking in your last > question. I’m guessing that you are referring to > synergies again?