A reverse takeover or reverse merger takeover is the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public. The transaction requires reorganization of capitalization of the acquiring company. Sometimes, the private company is bought by the public listed company through an asset swap and share issue. In a reverse takeover, shareholders of the private company purchase control of the public shell company and merge it with the private company; the publicly traded corporation is called a "shell" since all that exists of the original company is its organizational structure. The private company shareholders receive a substantial majority of the shares of the public company and control of its board of directors; the transaction can be accomplished within weeks. The transaction involves the private and shell company exchanging information on each other, negotiating the merger terms, signing a share exchange agreement.
At the closing, the shell company issues a substantial majority of its shares and board control to the shareholders of the private company. The private company's shareholders pay for the shell company by contributing their shares in the private company to the shell company that they now control; this share exchange and change of control completes the reverse takeover, transforming the privately held company into a publicly held company. In the United States, if the shell is an SEC-registered company, the private company does not go through an expensive and time-consuming review with state and federal regulators because this process was completed beforehand with the public company. However, a comprehensive disclosure document containing audited financial statements and significant legal disclosures is required by the Securities and Exchange Commission for reporting issuers; the disclosure is filed on Form 8-K and is filed upon completion of the reverse merger transaction. The advantages of public trading status include the possibility of commanding a higher price for a offering of the company's securities.
Going public through a reverse takeover allows a held company to become publicly held at a lesser cost, with less stock dilution than through an initial public offering. While the process of going public and raising capital is combined in an IPO, in a reverse takeover, these two functions are separate. A company can go public without raising additional capital. Separating these two functions simplifies the process. In addition, a reverse takeover is less susceptible to market conditions. Conventional IPOs are risky for companies to undertake because the deal relies on market conditions, over which senior management has little control. If the market is off, the underwriter may pull the offering; the market does not need to plunge wholesale. If a company in registration participates in an industry that's making unfavorable headlines, investors may shy away from the deal. In a reverse takeover, since the deal rests between those controlling the public and private companies, market conditions have little bearing on the situation.
The process for a conventional IPO can last for a year or more. When a company transitions from an entrepreneurial venture to a public company fit for outside ownership, how time is spent by strategic managers can be beneficial or detrimental. Time spent in meetings and drafting sessions related to an IPO can have a disastrous effect on the growth upon which the offering is predicated, may nullify it. In addition, during the many months it takes to put an IPO together, market conditions can deteriorate, making the completion of an IPO unfavorable. By contrast, a reverse takeover can be completed in as little as thirty days. A 2013 study by Charles Lee of Stanford University found that: "Chinese reverse mergers performed much better than their reputation" and had performed better than other similar sized publicly traded companies in the same industrial sector. Reverse takeovers always come with some shareholders. Sometimes this history can be bad and manifest itself in the form of sloppy records, pending lawsuits and other unforeseen liabilities.
Additionally, these shells may sometimes come with angry or deceitful shareholders who are anxious to "dump" their stock at the first chance they get. One way the acquiring or surviving company can safeguard against the "dump" after the takeover is consummated is by requiring a lockup on the shares owned by the group from which they are purchasing the public shell. Other shareholders that have held stock as investors in the company being acquired pose no threat in a dump scenario because the number of shares they hold is not significant. On June 9, 2011, the United States Securities and Exchange Commission issued an investor bulletin cautioning investors about investing in reverse mergers, stating that they may be prone to fraud and other abuses. Reverse mergers may have other drawbacks. Private-company CEOs may be naive and inexperienced in the world of publicly traded companies unless they have past experience as an officer or director of a public company. In addition, reverse merger transactions only introduce liquidity to a private stock if there is bona fide public interest in the company.
A comprehensive investor relations and investor marketing program may be an indirect cost of a reverse merger. The greater number of financing options available to publicly held companies is a primary reason to undergo a reverse takeover; these financing options include: The issuance of additional stock in a secondary offering. An exercise of warrants, where stockholders have the right to purchase additional shares in a company at predetermined prices; when many shareholders with wa
Marysburg is an unincorporated community in Blue Earth and Le Sueur counties in the U. S. state of Minnesota. The center of Marysburg is considered near the intersection of 243rd Street and John Street; the junction of Le Sueur County Road 15 and Blue Earth County Road 26 is nearby. Marysburg is located within Jamestown Township in Blue Earth County. From 1858 to 1903, the community had a post office. Marysburg is located within ZIP code 56063 based in Madison Lake. Nearby places include Madison Lake, Cleveland and Kasota. Marysburg, a community at the south edge of Washington Township, in section 15, platted January 24, 1859, was named by its first settler, John L. Meagher, an immigrant from Ireland, its postmaster during many years, was the probate judge for Le Sueur County; the community is at the north edge of Jamestown Township. Marysburg was settled by immigrants from both Ireland and Germany
USS Floyd County was an LST-542-class tank landing ship built for the United States Navy during World War II. Named after counties in Georgia, Iowa, Kentucky and Virginia, she was the only U. S. Naval vessel to bear the name. LST-762 was laid down on 24 June 1944 at Pennsylvania by the American Bridge Company. During World War II, LST-762 was assigned to the Asiatic-Pacific theater and participated in the assault and occupation of Okinawa Gunto in April 1945. Following the war, she performed occupation duty in the Far East until mid-November 1945; the ship was decommissioned in March 1946, reactivated on 3 November 1950 for service in the Korean War. On 1 July 1955 she was redesignated USS Floyd County. Following the Korean War, she operated with the Pacific Fleet Amphibious Force, including extensive service off South Vietnam from 1965 through 1968. During July 1965 she escorted the 9 Point-class cutters of Coast Guard Squadron One, Division 11, from U. S. Naval Base Subic Bay to An Thoi Naval Base, Phu Quoc Island and served for a short period as their support ship after reaching the island.
Floyd County completed two further deployments to Vietnam 1966-1968 including supplying Riverine Warfare bases on the Mekong River, serving as mother ship for the pioneer group of 12 PBR gunboats with crews at Cat Lo Naval Base, near Vũng Tàu. For a short period in 1966 she was anchored in Vũng Tàu Harbor, serving as a base of operations for a US Army, fire team from the 197th Armed Helicopter Company; the fire team had been assigned to provide air cover for Navy Swift Boat operations prior to the arrival Navy Seal Wolf gunships. Later she provided material support from Da Nang to the U. S. Marine Corps Cửa Việt Base south of the Vietnamese Demilitarized Zone. Floyd County returned from her final Vietnam deployment November 1968. Floyd County was again decommissioned on 3 September 1969. Laid up in the Pacific Reserve Fleet, the ship was struck from the Naval Vessel Register on 1 April 1975. LST-762 earned one battle star for World War II service, one for the Korean War, three battle stars and an award of the Meritorious Unit Commendation for service in the Vietnam War.
Sold for scrapping on 1 December 1975 by the Defense Reutilization and Marketing Service, the ship was again sold to Max Rouse & Sons of Beverly Hills, California on 4 December 1975. Taken in hand by Lake Union Dry Dock Company of Seattle and converted for commercial use, the ship was sold to Landing System Technology Pte. Ltd. of Singapore and renamed LST-1 in 1976. Arrived at Piraeus, having been acquired by Maritime & Commercial Company Argonaftis S. A. Panama, renamed Petrola 141 on 30 June 1978, she was placed in service in July 1980; the ship was sold for scrapping in 1988. This article incorporates text from the public domain Dictionary of American Naval Fighting Ships. "LST-762". Dictionary of American Naval Fighting Ships. Retrieved 13 June 2007. "LST-762 Floyd County". Amphibious Photo Archive. Retrieved 13 June 2007. Larzelere, Alex; the Coast Guard at War, Vietnam, 1965-1975. Naval Institute Press, Annapolis. ISBN 978-1-55750-529-3. List of United States Navy LSTs