Consolidating sales organizations

24-May-2018 01:34

Sometimes, however, a smaller firm will acquire management control of a larger and/or longer-established company and retain the name of the latter for the post-acquisition combined entity. Another type of acquisition is the reverse merger, a form of transaction that enables a private company to be publicly listed in a relatively short time frame.A reverse merger occurs when a privately held company (often one that has strong prospects and is eager to raise financing) buys a publicly listed shell company, usually one with no business and limited assets.Some public companies rely on acquisitions as an important value creation strategy.An additional dimension or categorization consists of whether an acquisition is friendly or hostile.In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the board and/or management of the target is unwilling to be bought or the target's board has no prior knowledge of the offer.Hostile acquisitions can, and often do, ultimately become "friendly", as the acquiror secures endorsement of the transaction from the board of the acquiree company.

From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity's stock, equity interests or assets.This year, I did inquiries and visits with about 500 different technology and service providers, did another 50 or so 1 on 1s at events and took around briefings from around 60 or 70 different vendors. To be sure, there were some unique, one-off, oddball inquiries.But with that large of a sample size, some clear trends started to emerge.Whether a purchase is perceived as being a "friendly" one or "hostile" depends significantly on how the proposed acquisition is communicated to and perceived by the target company's board of directors, employees and shareholders.It is normal for M&A deal communications to take place in a so-called "confidentiality bubble" wherein the flow of information is restricted pursuant to confidentiality agreements.

From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity's stock, equity interests or assets.This year, I did inquiries and visits with about 500 different technology and service providers, did another 50 or so 1 on 1s at events and took around briefings from around 60 or 70 different vendors. To be sure, there were some unique, one-off, oddball inquiries.But with that large of a sample size, some clear trends started to emerge.Whether a purchase is perceived as being a "friendly" one or "hostile" depends significantly on how the proposed acquisition is communicated to and perceived by the target company's board of directors, employees and shareholders.It is normal for M&A deal communications to take place in a so-called "confidentiality bubble" wherein the flow of information is restricted pursuant to confidentiality agreements.This usually requires an improvement in the terms of the offer and/or through negotiation.