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1. Do you charge any Money upfront to list my company?
NO, Often so called successful M&A and Business
brokerage firms charge upfront "marketing"
or "Packaging fees". We have heard every type
of "reason" to charge you a fee to list your
company. The bottom-line is if this company can not
afford to pay for the marketing of your company then
it shows that they are not successfully selling companies
therefore receiving success fees.
We are passionate about this point. If you have any
questions about this please call us.
2. What is a Merger?
The word Merger has a strictly legal meaning and has
nothing to do with how the combined companies operate
in the future. A merger occurs when one corporation
is combined with and disappears into another corporation.
All mergers are statutory mergers, since all mergers
occur as specific formal transactions in accordance
with the laws, or statutes, of the states where the
company's are incorporated. The post-transaction operations
or control of a company has no relevance on whether
a merger has occurred or not.
3. What is an Acquisition?
An Acquisition is the process by which the stock or
assets of a corporation become owned by a purchaser.
The transaction may take the form of a purchase of stock
or a purchase of assets.
4. What's the difference between a Merger and an
Acquisition?
An Acquisition is the generic term used to describe
a transfer of ownership, and Merger is a distinctive,
technical term of a particular legal procedure that
could or could not happen following an acquisition.
It is far more common for an acquisition to occur without
a following merger in today's marketplace.
5. What is a Leveraged Buyout?
A Leveraged Buyout (LBO) is a transaction whereby a
company's stock or assets are purchased with borrowed
money, making the company's new capital structure to
be a high percentage of debt. An acquisition of all
the selling company's stock, usually by a newly formed
corporation created for the sole purpose of the acquisition,
followed immediately by a merger of the buyer's new
company with the acquired company, so that the assets
of the acquired company become available to the buyer
to secure debt.
6. What is an Earnout?
An Earnout is a method of compensating a seller based
on the future earnings of a company. It is the contingent
portion of the purchase price. A common type of earnout
provides for additional payments to a seller if the
earnings exceed agreed-upon levels. Another type of
earnout may provide that certain debt given to the seller
as part of the acquisition price be paid out early if
earnings exceed agreed-upon levels.
7. What are the different forms of transactions?
There a three general types of transactions in the acquisition
of a business. The purchase of the assets of the business,
the purchase of the stock of the business owning the
assets, and a merger of the buyer with the business.
8. What is an Asset Transaction?
The acquired company transfers the assets of the business
to the purchaser.
These could include equipment, inventory, and real estate,
as well as intangible assets such as contract rights,
leases, patents, trademarks, etc.
These could be all or a portion of the assets owned
by the selling company.
The acquired company executes the specific types of
documents necessary to transfer the assets, such as
deeds, bills of sale, and assignments.
9. What is a Stock Transaction?
The seller transfers the shares in the acquired corporation
to the purchaser in exchange for an agreed-upon payment.
A Stock Transaction is appropriate when tax costs or
other problems of doing an asset transaction make an
Asset Transaction less appealing.
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