Should we acquire this company, and does the price make sense? Usually the most quantitative of the four types, and the one where a rich price can still be the right answer.
Why buy at all, and specifically, why buy rather than build the same capability organically?
Is the target itself strong, well-positioned, well-run, or just a convenient way into an attractive market?
Calculate the implied multiple, sense-check it against real comparables, then ask what synergies could justify paying above standalone value.
Integration risk, key-person dependency, regulatory hurdles: whatever could break the thesis after the deal closes.
A budget gym operator is considering acquiring a 15-site premium padel club chain to enter the fast-growing padel market.
Resolution: segmenting the market showed most new supply is budget outdoor courts, not a threat to this target's premium indoor positioning, so the saturation fear was overstated. On price, the synergy case (cross-selling to the existing member base) can justify some premium, but not all of it: recommend renegotiating toward 10-12x, with the rest structured as an earn-out tied to actual cross-sell performance.
Rejecting a deal purely because the multiple looks rich. A high multiple is a reason to dig into synergies, not an automatic pass, and a low multiple isn't automatically a good deal either if the target is weak.
Worth knowing all four before you walk in, you won't always get to pick which one shows up.