Reverse Mergers

What is a Shell Merger with a Public Shell Company?

A reverse merger, also known as a reverse takeover, is when you merge a public shell company with a private business entity. The shareholders of the private company purchase control of the shell corporation to merge them together.

We take companies public directly. But, if you are a consultant, lawyer or investment banker we can create a new public shell company for you. This is ideal for advisors or investment funds that may have a client that they want to become public quickly.

Our firm can build for you a new public shell corporation. It would be a public company which you can merge a private company into. These would be fully reporting SEC blank check public companies.

Reverse Merger Process: What is a Reverse Merger?

After merging the two businesses, the result is a public company with an ongoing business in it. The shareholders now own a majority of the shares in the new entity and control the board of directors.

The company then changes its name to the name of the private business that was reverse merged during the merger consolidation. To complete these types of financial transactions, private companies and shell companies must exchange information on each other and negotiate the terms of the reverse merger. They must then sign a share exchange agreement. Other considerations when contemplating a reverse merger are the reason why you want to go public.

The SEC, in an effort to offer greater transparency to investors in general, asks that companies that are being merged to provide information on the company that is part of the business combination. Similar to what you would provide on an S-1 Registration Statement but less detailed.

Reverse mergers by themselves do not raise capital, since they are only used as a tool for taking private companies public quickly. You can always take your company public directly. Most people consider it helpful for a company to become a publicly traded business to raise money – as opposed to staying a privately held enterprise. Of course, successfully raising capital always comes down to a variety of factors, such as: the management team, your industry’s potential and the line of business your company happens to be engaged in.

The best way to get accurate information about taking your company public is to consult with a service provider with many years of experience helping private companies to enter the USA capital markets by going public. IPO Consulting Services has its own a securities attorney with over 30 years of experience providing the guidance for big and small companies to take the next step in their corporate development by joining the ranks of publicly traded businesses.

Get in touch

IPO Consulting Services

Talk to us

IPO Consulting Services, LLC