The term purchaser is often used in finance in formal written documents. The term refers to the acquirer of an asset or company. The purchaser is often the entity, be it person or company that initiates the deal by selecting a target company or asset. The term is rarely used in general conversation but can be repeatedly found in official SEC filings as detailed below.
Along with purchaser and acquirer, the term buyer may also be used to refer to the purchasing entity. All these terms are used interchangeably without distinction.
One issue that may arise is in the case of a “merger of equals” the acquirer is slightly more difficult to define. This is because both companies will end up as part holders of the new or surviving entity. Our article The Differences Between Mergers and Acquisitions – Examples & Explanations explains this issue in greater depth. The business combination may have been suggested by either party. However, generally, the acquirer is referred to as the company which is the dominant firm amongst those involved but may also refer to the firm that initiated the transaction.
Purchaser Example
In the case of the Instructure (INST) takeover, it is clear Thoma Brava is the purchaser. In this example and in many official documents, the “purchaser” is often referred to as the parent. Form SC TO-T filed on February 24, 2020 by INST,
(b) Securities. This Schedule TO relates to the Offer by Purchaser to purchase all of the Shares at a purchase price of $49.00 per share, net to the seller in cash, without interest thereon and subject to any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Instructure has advised Parent and Purchaser that, as of February 17, 2020, there were (i) 38,263,210 Shares issued and outstanding; (ii) 582,432 Shares issuable under outstanding stock option grants with an exercise price of less than $49.00 per Share; and (iii) 2,436,258 Shares issuable pursuant to vested restricted stock units.
