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 ?
After this reverse acquisition, the combined company plans to raise enough equity to open new locations outside of Denver and intends to begin the process of becoming a franchisor of Illegal Burger restaurants in the near future.
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.
The deal constitutes a reverse acquisition of Atlantis under AIM rules.
The decision of the FSA to treat the purchase of the Alma Media shares as a reverse acquisition means that Alma Media is regarded as having acquired Almanova.
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.
Contract notice: Urakiskovaihteiden reverse acquisition devices.
30 December 2013 - US audio solutions specialist Parametric Sound Corp (NASDAQ:PAMT) said its shareholders had greenlighted its share issue in connection with the all-stock reverse acquisition of domestic audio peripherals maker VTB Holdings Inc, or Turtle Beach.
NASDAQ: ARCW) said it has filed the definitive proxy statement regarding its reverse acquisition by Quadrant Metals Technologies, LLC (QMT) and simultaneous acquisition of Advanced Forming Technology to create ARC Group Worldwide, Inc.
The deal is the latest stage in FIT's planned reverse acquisition of Eurotel, first revealed two months ago.
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.
McIlhargey further stated that, "The Company will commence raising the required financing necessary to enter into the next phase of the reverse acquisition.