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Reverse Acquisition

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Reverse Acquisition
An act where a private company purchases a publicly traded company and shifts its management into the latter. It also normally involves renaming the publicly traded company. This allows private companies to become publicly traded while avoiding the regulatory and financial requirements associated with an IPO. In order for a reverse acquisition to happen smoothly, the publicly traded company is usually a shell corporation, that is, one with only an organizational structure and little or no activity. The two businesses can then merge the private company's product(s) with the public company's structure. It also makes initial trading less dependent on market conditions, a key risk in IPOs. However, it is important to note that a reverse acquisition only provides the private company with more liquidity if there is a real market interest in it.

reverse acquisition
An acquisition in which the company taken over becomes the surviving entity. A reverse acquisition is sometimes used to acquire and convert a private company into a public company without being required to go through a lengthy registration process.


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A group structure change generally occurs when a corporation succeeds another corporation as the new common parent of a group in a downstream merger or a reverse acquisition and the group of the old common parent is treated as continuing in existence.
The reverse acquisition by USWeb of CKS was announced in early September.
as a reverse acquisition and, as a result, there will be a deemed year end change.
 
 
 
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