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An “acquihire” is a transaction in which a company is bought predominantly for the employees working there and not for the product/service it is bringing to market or its technology. The hope is that, by purchasing teams of smart people who have a history of working together, purchasers can accelerate their own business growth. These transactions usually offer limited or negative returns for early investors in the company being sold, and usually the acquiring company does not continue to build and promote the acquired company’s products and services.

Last reviewed: June 1, 2022