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Mergers and Acquisitions

Issuer Consulting provides full advisory and consulting services for mergers and acquisitions for both public and private companies. To understand the benefits of choosing Issuer Consulting, it is important to first understand mergers and acquisitions.

A merger occurs when two companies agree to combine and become one company. As a result of a merger, both companies surrender their shares; shareholders then exchange their old shares with shares of the newly formed company. Common Stock shareholders have the right to vote on mergers or acquisitions.  Although some Preferred Stock classes may also have voting rights. Before investors can exchange stock, a majority of shareholders must approve the merger.

An acquisition is not quite the same as a merger. In an acquisition, one company buys another company, with stock, cash, or both. All of the target company’s stock is surrendered to the buyer. Rather than combining with another company (a merger), acquisitions occur when one company purchases another company. An exchange of shares does not take place; instead, the target company’s stock becomes untradeable, if public, and the target company’s shareholders receive shares and/or cash equivalent to the value of those shares.

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Consequences of M&A

When companies merge, investors’ stock certificates usually no longer reflect the proper amount of shares owned or the value of those shares. This happens because when two companies merge, barring an unusual coincidence, will not value their stock equally. When comparing the value of companies’ securities, ratios are often used. Companies with stock of equal value have a 1:1 ratio, but this is rare. It is more likely that stock prices become volatile before a merger and that the ratios are not equal, or sometimes fractional (e.g., 1:2.5). In a 1:2.5 ratio, 2.5 shares of one company are of equal value to one share of a second company. When shares are exchanged in this way it is called a stock-for-stock merger.

Cash-for-stock acquisitions, on the other hand, occur when an acquiring company pays a fixed cash amount for its target company’s shares. Buyers pay shareholders cash based on the amount of shares they own. As a result of the exchange or change of ownership of shares in a merger or acquisition, a stock certificate may require revision.

Discuss

Consult with you on any aspect of the M&A process, making the transaction easy and efficient

Assess

Assess your budget planning, cap table and structure, and any necessary forms required by the SEC

Act as Your Guide

Work with key players in your M&A transaction, notify shareholders that your company is planning to undergo this transition and send them the necessary proxy info to vote on this decision

Benefits of Our Service

Here’s why you should choose Issuer Consulting for guidance regarding your merger or acquisition. Our consulting services include:

  • Find and identify target companies for your company to merge with.
  • Explore the benefits and drawbacks of merging with your target company and determine if it’s the right move for your company
  • Discuss with you both long-term and short-term expectations for your business post M&A
  • Discuss or plan your M&A as a potential exit strategy from the public market
  • Assist you with financial planning and projections before and after completing M&A
  • Facilitate and advise you through the investor proxy voting process
  • Assess cap table and share structure to determine most optimal scenario for you
  • Help you negotiate and work with intermediary brokers, attorneys and other key players in the deal
  • Assess and discuss any required regulatory filings

Conclusion

Issuer Consulting not only helps you evaluate the different technicalities associated with M&A, but prioritizes your business needs first. Beyond providing basic cap table and share structure review, we will ensure you are making the best decision for you and your shareholders.

Contact Issuer Consulting today!