Mergers and acquisitions (M&A) are becoming more and more common in today’s business world. Mergers & acquisitions consultants bring a strategic, value-creating perspective to every engagement to deliver fresh insights via an efficient, results-oriented process.
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Here are some of the most common terms you should know when it comes to M&A:
1. Merger: When two companies merge, they create a new company that is usually larger than the two original companies. The goal of a merger is usually to create a stronger company with greater resources and capabilities.
2. Acquisition: An acquisition is when a company purchases another company, typically for its assets and/or its business. Acquisitions can be expensive, but they can also lead to important opportunities for companies in the marketplace.
3. Reverse Merger: A reverse merger occurs when a company buys itself out from under its current shareholders. This type of M&A is often used by smaller companies to gain access to larger capital markets.
4. All-Cash Transaction: An all-cash transaction is when a company buys another company without any underlying securities or debt obligations. This type of transaction is often used by investors who want to avoid riskier investments.
5. Equity Transaction: An equity transaction involves the issuance of new shares of stock in exchange for the assets of another company.