Scale or scope? The critical choice for business buyers

Description

Abstract: Most business acquisitions fall into one of two broad categories: scale or scope. While an M&A transaction can realize both of these goals, successful buyers typically decide which type of deal will best serve their long-term strategic objectives before they begin the acquisition process. This article looks at some of the more common potential economies of scale, while noting that scope buyers can use acquisitions as a springboard into new and unfamiliar territory. A sidebar discusses the seller’s role in the process.