Why financial investors acquire twice as often as operating companies
In many sale processes, corporate acquirers end up bidding against private equity funds, holding companies and investment firms. Our analysis of more than 1.6 million recorded acquisitions shows how much weight this group carries: financial investors make up 19% of acquirers but account for 36% of all recorded acquisitions.
On average, a financial investor completes around twice as many acquisitions as an operating company. The more useful question for corporate M&A teams is why, and which parts of that model they can realistically adopt. This article draws on chapter 4 of our industry report M&A as a System.
This article covers one chapter. The full report also looks at the role of financial investors, the geographic hotspots of M&A, the outlook for next year and the assessments of six M&A experts. For more insights, download the report M&A as a System here for free.
In this article you'll learn:
- Why the activity gap is driven more by organization than by available capital
- How financial investors change the starting position in a bidding process
- Where M&A experts disagree on how far corporates should follow the PE model
- How a one-page criteria sheet speeds up decisions on incoming opportunities
The capital markets gap in numbers
Financial investors in the dataset
| Metric | Financial investors |
|---|---|
| Share of all acquirers | 19% |
| Share of all recorded acquisitions | 36% |
| Acquisitions per company vs. operating companies | Around 2x |
Financial investors, holding companies and investment firms make up less than a fifth of all acquirers, yet they are behind more than a third of all recorded acquisitions. One note on method: acquirers are classified as financial investors based on their industry classification (Capital Markets), not on the type of individual transaction. The share should therefore be read as an approximation.
Structure, not capital, explains the difference
The gap is less about better investment decisions than about different organizational set-ups. For a financial investor, acquiring companies is the core business. For an operating company, it is usually an additional strategic task on top of running the business. What an operating company often has to organize as a standalone project is business as usual for a financial investor.
How M&A is typically organized
| Element | Financial investors | Many operating companies |
|---|---|---|
| Team | Dedicated deal team | Project team set up per transaction |
| Acquisition criteria | Defined investment criteria | Opinion formed case by case |
| Target pipeline | Continuously maintained | Often created when an advisor calls |
| Process | Part of day-to-day operations | Organized as a standalone project |
Dirk Sachse, Managing Partner at CFN Corporate Finance Nord, points to an additional structural advantage that does not show up in activity data:
“Financial investors do not bear the operational integration risk in the post-merger phase, which increases the likelihood that the transaction will ultimately succeed.” Dirk Sachse, Managing Partner, CFN Corporate Finance Nord
Two implications for corporate acquirers
Competition for targets
In many processes, strategic acquirers compete with financial investors whose organization is built to buy companies. Shorter decision paths, established workflows and a different valuation logic change the dynamics of the bidding process. Companies that only start evaluating a target once the sale process is underway begin with a structural disadvantage.
Your own M&A organization
Differences in acquisition frequency come down to the structures behind them: clearly defined acquisition criteria, clear responsibilities and a target pipeline that is developed continuously. That does not mean an operating company needs to be set up like a financial investor. What matters is building the structures that turn M&A into a strategic instrument that can be used systematically.
“Operating acquirers should not try to play private equity. But they should adopt the transaction discipline of private equity.” Daniel Funk, CEO & Co-Founder, CVT Partner
How far should corporates follow the PE model?
The six experts we interviewed largely agree on the cause: resources, process know-how and management capacity rather than capital. On the consequences, three positions emerged.
Three positions from the expert interviews
| Position | Expert | Core argument |
|---|---|---|
| Routine | Christian Muschick, Managing Partner, Navigator Group | Strategic acquirers often lack experience and therefore cannot handle the same deal volume |
| Role | Dirk Sachse, Managing Partner, CFN Corporate Finance Nord | Operating acquirers can professionalize, but will not match a financial investor's M&A intensity across the board |
| Business unit | Hendrik Rathje, Partner, Möhrle Happ Luther | Build M&A as a dedicated business unit, just as you would build a strategic sales function |
These positions are not mutually exclusive. They describe different levels of ambition, and the question is less who is right than which level is realistic for your company.
Start with one page of acquisition criteria
The report's recommendation for operating companies is pragmatic: define clear criteria before you identify targets. Financial investors have this as standard. Most operating acquirers do not. One page is enough:
- Target size range (revenue or EBITDA)
- Relevant regions and submarkets
- Three must-have criteria and three exclusion criteria
- The maximum price you are willing to pay
How you know it is working: the next incoming opportunity is assessed against this sheet within five working days, rather than first requiring an internal consensus. Criteria are only as good as your view of what actually exists in your segment. A complete market overview of potential targets turns the sheet into a robust search logic rather than a wish list.
Get the full industry report
The full report puts these findings in context: who shapes the M&A market, where acquirers are based, what the experts say and what to expect next year. For more insights, download the report M&A as a System here for free.
Frequently asked questions
What share of M&A deals do financial investors account for?+
In the StrategyBridgeAI dataset of more than 1.6 million recorded acquisitions, financial investors account for 36% of all acquisitions while making up only 19% of acquirers.
Why do private equity firms acquire more often than corporates?+
Mainly because of organization. Acquiring companies is their core business, supported by dedicated teams, defined investment criteria, established processes and continuously maintained target pipelines. They also do not carry the operational integration risk after closing.
Should corporate acquirers copy the private equity model?+
Not one to one. The experts interviewed for the report recommend adopting PE transaction discipline, such as defined criteria, clear responsibilities and a continuous pipeline, without trying to become a financial investor.
What should an acquisition criteria sheet include?+
A target size range in revenue or EBITDA, relevant regions and submarkets, three must-have criteria, three exclusion criteria and the maximum price you are willing to pay. One page is enough.
How are financial investors defined in the M&A as a System report?+
Based on the acquirer's industry classification (Capital Markets), not on the type of individual transaction. The reported share is therefore an approximation.
Want to see which financial investors and strategic buyers are active in your segment? Book a demo and see StrategyBridgeAI live with your own use case.
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