DEFINITION of 'Financial Buyer'

A type of buyer in an acquisition that is primarily interested in a company's return on equity, investment, burden on management and cash flow. To determine this information, a financial buyer will carefully look over a company's financial statements and assets.

A financial buyer is typically a long-term investor looking for a solid, well-managed company. Financial buyers rarely make any immediate changes, except in turnaround situations where companies are not currently profitable.

BREAKING DOWN 'Financial Buyer'

Many everyday retail investors could be considered financial buyers. An investor taking either a value or growth approach to investing over the long term is following many of the same strategies that large financial buyers do.

Another example of a financial buyer is a former executive looking to purchase a job by finding a company to manage or turn around; alternatively, he or she could just be holding companies looking for a good return on investment and plan to keep current management in place.

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