A trade buyer is a strategic buyer that acquires or purchases an existing business. The trade buyer is usually someone who already has a business and looks to gain synergies by taking over other business. The motives of purchase could be eliminating competition or taking over a company in a new region instead of starting a new one. Trade buyers generally buy or acquire a business which is similar to the business they already own.
For example, a food store owner will purchase another food store owner. Sometimes trade buyers can buy a different business also. For example, a hardware company owner can acquire a software company to gain operational and financial synergies.
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