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Why would an acquirer not use cash?

The acquirer may not have enough cash, or they have set aside cash on the balance sheet for another purpose such as:

  • Market expansion
  • Capital expenditures
  • Repay debt
  • Meet debt covenants
  • Absorb any volatility in revenues, expenses, and cash flows
  • Meet net working capital requirements
  • Satisfy a contingent liability

Perform share buyback

Pay out dividends

Acquire another company