easy · Investment Banking valuation-core

Which buyer is generally able to pay a higher premium in an auction for a mature industrial company, and why?

  1. Both can pay the same, as valuation is based only on LTM EBITDA.
  2. A financial sponsor, because they have a lower cost of capital.
  3. A strategic buyer, because they can realize cost and revenue synergies.
  4. A financial sponsor, because they use higher leverage.

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