The Strategic Premium: An Inside Look at M&A Prices

Business Valuation UpdateVol. 27 No. 5
May 2021
Jim Horvath, FCBV, ASA, CVA, CPA, MBA
discounts & premiums
discounts & premiums, synergy, investment value, levels of value


Synergistic/strategic value should not be combined into one level in the typical chart that shows levels of value. Some buyers pay a “strategic premium” that propels strategic value to the top of the value chart and well in excess of the expected synergistic value. The author uses real-world examples to illustrate this concept.