... buyers seek a return on their capital and that return more or less puts a cap on what they can afford. * Corporate and industry buyers are buying for strategic objectives such as obtaining additional capacity, products, expand sales or diversification. Such buyers are generally willing to consider a premium over market value. * Strategic or synergistic buyers believe that the "synergies" inherent in the deal will allow it to pay an even higher premium that will be justified on the basis of the benefit of the synergies. If reason is at the helm, synergies will pay for themselves and come from things like revenue enhancement, cost savings, process improvements, and balance sheet composition. However, paying a significant premium based upon anticipated synergies is a risky proposition. Higher prices mean lower margins for error and in many cases synergies fail to be realized. Bargain hunters are likely to favour valuation ...

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