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.
References in periodicals archive ?
The reverse acquisition rules generally look to the substance of the transaction and recharacterize the transaction so that the larger group is treated as continuing to exist.
Yang Chen to serve as our Chief Financial Officer and Vice President, effective immediately at the completion of the reverse acquisition.
The principal transaction covered by the new regulations involves a new holding company where the group remains in existence because the transaction is a reverse acquisition under Treas.
These measures represent results of operations of the company net of any of the nonrecurring expenses related to the reverse acquisition transaction between ARC and QMT as well as the acquisition of AFT.
46 million as compared with same period last year, which was primarily due to one-time charges associated with the closing of the reverse acquisition.
First, considering the reverse acquisition, in 1984 there was no special rule in the consolidated return regulations requiring a new parent to replicate the E&P of a former parent.
disposal would result in a reverse acquisition, with Metorex owning 55% in PAR.
This increase was primarily attributed to one-time charges of approximately $880,000 associated with the issuances of warrants related to the closing of the Company's reverse acquisition in May 2008.
accounting for the reverse acquisition of TimeGate Group Limited.
The number of shares that would be issued by the Company in the reverse acquisition has not yet been determined.
The determination of whether a transaction is a reverse acquisition under the consolidated return regulations has a large impact on a number of consolidated return issues, such as the application of the separate return limitation year rules under Temp.
On April 15, 2008 BMXP Holdings announced that it had signed a Letter of Intent with Freedom Environmental Services pursuant to which BMXP Holdings intends to combine with Freedom Environmental Services through a reverse acquisition.