Mergers and Acquisitions Defined

Acquisition

Acquiring control of a corporation, called a target, by stock purchase, cash or exchange, either hostile or friendly. This can be done facilitate with a privately held or public held corporation. Acquisitions can also include intellectual property such as a patent, trademark of a domain name.

Asset Acquisition

A buyout strategy in which key assets of the target company are purchased, rather than its shares. This is particularly popular in the case of bankrupt companies, who might otherwise have valuable assets which could be of use to other companies, but whose financing situation makes the company unattractive for buyers (an asset acquisition strategy may be pursued in almost any case where the potential target company has an unattractive financing structure). Further, the asset acquisition strategy might be pursued if the acquirer is interested in certain specific assets, and not all the possible target assets.

Horizontal Acquisition: An acquisition by one company of another company in the same industry

Vertical Acquisition: An acquisition in which the acquirer and the target are in the same industry but focus on different parts of the production process.

Merger

The combining of two or more entities into one, through a purchase acquisition or a pooling of interests. Differs from a consolidation in that no new entity is created from a merger.

Horizontal Merger: Merger of two or more companies with similar product lines.

Vertical Merger: Merger of a vendor and a customer

Hostile Takeover

A takeover which goes against the wishes of the target company’s management and board of directors. opposite of friendly takeover.

Blitzkrieg Tender Offer

This happens in a takeover when a tender offer is so compelling that the offer is accepted very quickly. This is considered a friendly takeover.

So if you are a publicly traded or privately held company and are looking to grow by acquisition or are looking to be acquired you should call us at 646-397-0588.