This is a short article. I took about half of it t
Post# of 8439
(Total Views: 373)
Posted On: 02/10/2022 11:41:22 AM
This is a short article. I took about half of it that I thought was the most relevant to our hypothetical situation.
https://investmentbank.com/stock-consideration/
When companies look toward inorganic growth in the form of mergers and acquisitions, the frequent questions that arise throughout this process revolve around consideration. Consideration is how sellers get paid and buyers pay. The ways in which a business seller can be compensated in a merger or acquisition are fairly extensive and the structure of each deal can get as complex as the dealmakers desire. The structure of each deal typically includes cash, company stock, a payable note or some combination of the three. From the buyer’s side, the cash may be sourced from either debt or equity.
Buyers: Doing Deals & Preserving Cash
Companies and people are almost always constrained by limited resources that can thwart more rapid growth. Taking a company public and using that company’s stock in doing deals can be an excellent source of consideration for the firm looking to perform an industry roll-up via strategic M&A. Going on a buying spree using the company’s public stock can help the business grow its top-line metrics, allow an industry to reap some of the advantages of scale and ultimately move a small, public company into a position of market dominance in a heretofore dispersed and fragmented niche market.
Using stock as consideration for completing strategic M&A deals certainly has its risks, but the upside potential to the sophisticated acquirer using public stock as consideration can be huge.
If (IF !!!) Viant is considering acquiring BIEL the above scenario is what I think they want. Using the stock for M&A to dominate the PEMF non-invasive, non-opioid market. They have the infrastructure to make it happen, imo. Right now is the time as this market for PEMF is in its infancy. All they would need is capital, and leverage, to finance the deals. Getting BIEL makes them public w/o all muss and fuss of an IPO. Public companies have access to more resources than a private one.
later, WBeacham
https://investmentbank.com/stock-consideration/
When companies look toward inorganic growth in the form of mergers and acquisitions, the frequent questions that arise throughout this process revolve around consideration. Consideration is how sellers get paid and buyers pay. The ways in which a business seller can be compensated in a merger or acquisition are fairly extensive and the structure of each deal can get as complex as the dealmakers desire. The structure of each deal typically includes cash, company stock, a payable note or some combination of the three. From the buyer’s side, the cash may be sourced from either debt or equity.
Buyers: Doing Deals & Preserving Cash
Companies and people are almost always constrained by limited resources that can thwart more rapid growth. Taking a company public and using that company’s stock in doing deals can be an excellent source of consideration for the firm looking to perform an industry roll-up via strategic M&A. Going on a buying spree using the company’s public stock can help the business grow its top-line metrics, allow an industry to reap some of the advantages of scale and ultimately move a small, public company into a position of market dominance in a heretofore dispersed and fragmented niche market.
Using stock as consideration for completing strategic M&A deals certainly has its risks, but the upside potential to the sophisticated acquirer using public stock as consideration can be huge.
If (IF !!!) Viant is considering acquiring BIEL the above scenario is what I think they want. Using the stock for M&A to dominate the PEMF non-invasive, non-opioid market. They have the infrastructure to make it happen, imo. Right now is the time as this market for PEMF is in its infancy. All they would need is capital, and leverage, to finance the deals. Getting BIEL makes them public w/o all muss and fuss of an IPO. Public companies have access to more resources than a private one.
later, WBeacham
(1)
(0)