Reverse Mergers

Merger Word Letter Tiles Alliance Join Combine Acquire Businesse

22 Sep Using Reverse Mergers for Industry Consolidation and “Roll Ups”

The reasons for performing a reverse merger are wide and varied. Each individual situation is unique and typically requires an in depth understanding of the underlying goals of the company in question as well as the pitfalls and risks associated with any course of action relative to the business. In many instances, going public is not the right answer. However, in certain situations, going public is the very best move for maximizing shareholder value. To be specific, going public is ideal in large dispersed industries where consolidation is present and where industry roll-up opportunities exist. Many a financial engineer has made their fortune by...

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19 Sep Horizon Pharma #RTO of Vidara Therapeutics on NASDAQ

This news initially came yesterday and the deal was set to be closed as of today. The reverse takeover by Horizon Pharma of Vidara Therapeutics represents a logical combination of two biotherapeutic companies. Both firms hold proprietary rights to biotechnology drugs for the treatment of inflammation, osteoporosis and arthritis. Horizon Pharma, Inc. (NASDAQ: HZNP) today announced that at its Special Meeting of Stockholders held today, proposals related to Horizon's acquisition of Vidara Therapeutics International plc were approved by Horizon's stockholders. As previously announced, on March 18, 2014, Horizon Pharma, Inc. ("Horizon"), Vidara Therapeutics Holdings LLC, Vidara Therapeutics International plc, an Irish public limited...

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18 Sep Alibaba #IPO: Senator Bob Casey is Presumptuous

I just picked up piece from Senator Bob Casey (D) of Pennsylvania from NY Times DealBook. He's claiming the deal structure of the Alibaba IPO should cause the regulators to have more scrutiny for other similarly structured deals that are either reverse mergers or some type of Variable Interest Entity (or VIE). His claim is that foreign (and in particular Chinese) -based entities have been responsible for over $18 billion in losses to American investors over a decade. He's right about picking out the bad apples, but unfortunately citing a decade's worth of reverse mergers and claiming past performance will be...

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16 Sep Fraud, Vitamins & Reverse Takeovers

Some great news stories hit the press today that I thought would be worth covering. Twinlabs Reverse Merger The first comes from Twinlabs, maker of the popular Metabolife supplements just went public again. Details of the transaction as reported by TheDeal. The reverse merger with San Diego-based shell company Twinlab Consolidated Holdings Inc. was scheduled to close on Sept. 15, according to a Sept. 4 filing with the Securities and Exchange Commission. The shell company was previously known as Mirror Me Inc. before changing its name last month in preparation for the merger. Mirror Me had gone public in May with a stock offering...

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15 Sep The World’s Richest Doctor Got His Start with a #ReverseMerger

Sometimes I get tired of the industry touting Blockbuster, Berkshire Hathaway, Occidental Petroleum and Texas Instruments as the poster children for reverse takeovers. They're certainly helpful, but I'm always on the lookout for stellar, recent examples. I just finished reading an interesting piece in Forbes about how the world's richest doctor--Patrick Soon-Shiong--is trying to fix medicine with a combination of capital, big data and true grit. It's a fascinating piece that not only outlines his plans for completely altering the landscape, structure and ultimate costs of the healthcare system, but also showcases that he began his foray into the billionaire...

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Due Diligence

10 Sep Reverse Merger Due Diligence

As I've said before, I think a shell is a great adjective for a previously publicly traded company as it indicates something died inside. Proper due diligence of a public shell is an absolute necessity for private companies looking to take their business to the public markets. What follows is a good starting list of due diligence items (although not complete exhaustive) when investigating a public shell corporation.   Check required SEC filings including those required by directors, officers and shareholders with greater than 5% equity in the business. It's good to ensure all filings are current and such reports should provide...

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09 Sep Drones & 3D Printing — What’s Next?

Going public early through the cheaper "back door" always seems favors companies poised at high growth markets. Traditionally new technology, changes in regulation (like the recent spat of marijuana reverse mergers) and Intellectual Property help to push smaller microcap companies to raise money via the reverse merger route. Some of the more sexy markets for tech these days are also beginning to use reverse mergers to take their companies public, raise awareness and ---ultimately---raise money for their businesses. The first comes to us from the maker of drones, Drone Aviation (as of the writing of this piece, the stock sits at...

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Multilevel Marketing

08 Sep Why MLMs Make Some of the Best Reverse Merger Targets

I personally know some folks who have done extremely well starting and establishing network marketing companies. Those that start the companies are the ones that really make out like bandits. They're quite literally at the top of the food chain. To understand the nuances, benefits and issues relating to MLMs, it would be wise to visit the Wikipedia page outlining the various business models. It's a pretty good neutral version of the business model. Many other articles out there are simply "warnings" for the unwary. Love them or hate them, MLM businesses have been successful across nearly every market niche.  They also...

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Different Currencies Concept Crowdfunding

06 Sep Sell-Side Liquidity Solution for Owners of Private, Closely-Held Businesses: Crowdfunding PIPE Transactions Directly into a Reverse Merger

Approximately 10,000 baby boomers will retire each day for the next 19 years. Of these, it is estimated that up to 7% own and operate businesses. With roughly 25% of the U.S. population retiring in the next two decades, the largest transfer of both personal and business wealth in the history of mankind has already begun. Significant opportunities exist for dealmakers assisting in the transfer and consolidation of business assets over the next two decades. Our model offers an alternative to traditional private equity for accredited investors looking to take advantage of the large growth in the M&A market over the...

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marijuana reverse merger

05 Sep Getting High on Marijuana RTOs

There have been an overabundance of marijuana RTOs in the news lately. So much so that the SEC has even issued a warning regarding investing in these securities. Additionally, many of the shells (both manufactured and otherwise) are explicitly restricting investment in marijuana or cannabis-related businesses. We ourselves will not get into this arena--for numerous reasons. Here are a few reasons marijuana-related reverse mergers represent a high risk for investors and the public at large. Legality Outside the SEC  Some pot-centric businesses are not even legal. The SEC may issue the green light on a reverse merger with a business focused on...

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