Thursday, November 7, 2013

A Review on a Reverse Merger

Reverse Merger

Consider on a growing and evolving business where owners or the executives plan have a reverse merger and go on public. For some people, they may be unfamiliar with the process and even its meaning. However, they are able to notice on a certain private company that goes on public in a matter of time. Once a private firm goes on public, more options and windows of opportunities will be opened. In other words, reverse merger allows the business to grow and take the lead without sacrificing on the cost, complications, and most of all, the time. It has always been a marketer's dream to keep his business on the top, therefore, we will learn how to reach the goal and allow his dreams come to life through reverse merger. This blog will iron the complexities of keeping and running the company as it evolves and grows. 

Before anything else, we need to define on some terms that will be used to allow the company to soar. You may have encountered a few of the recent corporate mergers that have enabled quite a number of private businesses to go on public. So, what does reverse merger mean? Consider this as a reverse takeover. Furthermore, this is a business transaction where such private corporation or company buys a majority of the ownership shares in a public company. Thus, enabling the private firm to go on public without the passing thru the obstacles, or better yet, going on public without taking the normal path such as preparing for an initial public offering (IPO).  This public company, otherwise known as the public shell company, changes its name to its former name of the present non-existent private company. In addition, business operations will proceed prior to the business acquisitions process. 

Is it Good?
Most marketers believe and consider merger and acquisition strategies as tools to keep and allow the business to grow. Reverse mergers may have its drawbacks for the private business, not to mention the time and cost. However, since the process only takes 120 days (three months) before a new company arise, marketers and entrepreneurs wanted to take this opportunity to establish a well improved business. In addition, since the cost of completing the process consists of a flat fee makes it a great decision to take for the benefit of the business. 

When you want to consider on the normal procedure of going on public, reverse merger cost lesser than IPO's. Plus, the fact that reverse mergers have complete access to a number of investors, can greatly benefit the business and generate on the leads once it goes on public. Although owners would still be responsible in promoting and advertising the new and improved company, finding for new investors will always be easy. 

In conclusion, if you want your business to grow and keep on running, reverse merger is a decision that can make positive changes on the company. Investors prefer public shell companies because they believe their future in these kinds of businesses. In other words, they have better chances to raise their initial capital. 

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