Christensen and his co-authors argue that most acquisition mistakes are category errors. A leverage-my-business-model acquisition buys resources, customers, capacity, products, to feed the buyer’s existing machine, should be priced like a component, and should usually be absorbed. A reinvent-my-business-model acquisition buys a different machine, deserves a price that reflects its disruptive trajectory, and is destroyed by absorption. Paying reinvention prices for component assets, or absorbing the business model you meant to preserve, are the twin failures.
The Institute’s reading: this maps directly onto private deals. A distributor buying a competitor’s routes is leveraging; buying a software company that changes how the industry orders is reinvention, and stapling it to your org chart will kill the thing you paid for. The article is short, free of jargon debt, and worth rereading at the start of every thesis.