Predator

AAA

DEFINITION of 'Predator'

In mergers and acquisitions, a company with sufficient financial means to easily bear the risks associated with acquiring other companies. Predators are considered to be the financially strong company in the merger or acquistion. The weaker acquisition targets are sometimes called "prey," because they can be snatched up by more powerful firms. Many firms fall somewhere in the middle of these extremes.

INVESTOPEDIA EXPLAINS 'Predator'

Although strategic acquisitions can be a great way to expand, there is considerable financial risk involved. Careful analysis must be performed to ensure that the acquiring company does not overpay for the target. In addition, considerable due diligence must be performed to ensure that there are no surprises lurking in the target company. Finally, it may take considerable financial capital to restructure and consolidate the two companies into one cohesive unit once the acquisition is complete.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Dissenters' Rights

    State legislation that allows shareholders of a corporation the ...
  3. Acquisition Premium

    The difference between the estimated real value of a company ...
  4. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. Friendly Takeover

    A situation in which a target company's management and board ...
Related Articles
  1. Finding The Best Buyer For Your Small ...
    Entrepreneurship

    Finding The Best Buyer For Your Small ...

  2. 8 Reasons M&A Deals Fall Through
    Bonds & Fixed Income

    8 Reasons M&A Deals Fall Through

  3. Accretion / Dilution Analysis: A Merger ...
    Fundamental Analysis

    Accretion / Dilution Analysis: A Merger ...

  4. Parents And Spinoffs: When To Buy And ...
    Options & Futures

    Parents And Spinoffs: When To Buy And ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center