Many
well-known companies have gone public through the reverse
merger process. In 1970, Ted Turner completed a reverse
merger with Rice Broadcasting which grew into Turner Broadcasting
Systems. Likewise, RadioShack Corp., Blockbuster
Entertainment, Inc., Siebert Financial Corp., Waste Management,
Inc., and Anthony Robbins firm, DreamLife, all trace their roots
to a reverse merger.
Market Ideas, Inc. is a leading financial and capital markets
consulting firm, which provides turnkey services to its clients
who seek to go public through the reverse merger process.
With corporate offices in downtown Chicago and associates'
offices in New York City, Los Angeles, Miami, and Hong Kong,
Market Ideas helps clients nationwide and internationally
become public entities. Market Ideas conducts a full range
of services, from helping companies find a merger candidate,
conducting due diligence, notifying shareholders, closing the
merger, achieving exchange listing requirements, raising
financing, providing public and investor relations, maintaining
investor value and trading liquidity, and engaging in block
securities sales. To achieve these goals, Market Ideas
and its associates provide expert advice in all of the areas
that are required to successfully complete a reverse merger
transaction. This includes strategic planning, corporate
and securities law, S.E.C. accounting, investor relations,
transfer agency, capital raising, and investment banking
services.
Being a public company offers many advantages. Having
publicly traded stock provides liquidity for shareholders, a
recognized market value of the company, stock to use for
acquisitions, and employee stock ownership benefits.
When publicly traded, a company has a market for its stock,
which provides an identifiable value and liquidity, which are
important to investors and usually not available in private
companies. Furthermore, companies that would benefit
include those that plan to grow through acquisition and can
therefore use publicly traded stock as a currency for
acquisitions. In addition, companies that want to
provide liquidity, or an exit strategy for their shareholders,
would also benefit.
Being public also offers companies the ability to compensate
employees with stock options. This allows companies to
attract better employees, who are not satisfied merely with a
good salary, but who also want an opportunity to gain
additional income by exercising stock options.
Typically, companies go public through an initial public
offering, or IPO. A reverse merger is a transaction
in which a private company becomes public when it is acquired
by an existing public company, resulting in a change of
control. The reverse merger occurs when a public shell
company acquires an existing private company.
Generally, the existing public company used in a reverse
merger is called a shell corporation. A public shell is a
corporation that went public at some point in the past and
currently does not have any operations. Since the public
shell went through the registration process with the Securities
and Exchange Commission and has shareholders that own free
trading stock, it remains a public company.
The shell typically has no assets, and the consideration that it
gives to the seller of the private company is newly issued
stock. The number of shares issued is typically so great
that the private company becomes the majority owner of the
public company.
Strategic planning is critical to conducting a successful reverse
merger. Our professionals are experts in various techniques
to help achieve successful transitions from private to public
status. Market Ideas helps clients evaluate all aspects of
their goals and how to achieve them. Corporate strategy
planning begins with identifying a company's objectives and how
these relate to them being public. This includes
determining whether being public meets the goals of the company
and its shareholders. Next, it requires the identification
of the proper public shell. Negotiations with the public
entity include not just the capital required, but agreeing to a
properly designed capitalization structure to meet the company's
objectives and any anticipated public market requirements,
including future acquisitions, raising capital, shareholder
liquidity, stock options, and employee stock ownership
programs.
Do you have control of a public vehicle looking for a merger
candidate?
Do you have a private company looking to go public via reverse
merger?
If so, we may be of assistance. Please
a complete description of your company, and one of our associates
will contact you.