Private Equity Transaction Timeline There are various steps involved in a Private Equity Transaction Timeline. The diagram below shows the different steps in a M&A transaction from the private equity side, along with a tentative timeline. Steps in a Private Equity Transaction Timeline 1. Teaser Sent by Bankers One of the first steps of buy-side M&A…
What is a Yellow Knight? A Yellow Knight is a company that attempts to mount a hostile takeover of another company but ends up instead discussing the idea of a merger with the target company. The change in strategy may occur when the targeted company resists the hostile takeover and the acquirer is forced to be…
Capital Raising Process – An Overview This article is intended to provide readers with a deeper understanding of how the capital raising process works and happens in the industry today. For more information on capital raising and different types of commitments made by the underwriter, please see our underwriting overview. Book Building Process During the second…
What is a Black Knight? In corporate finance, a company that is offering or executing a hostile takeover of the target company is termed a black knight. A hostile takeover is an acquisition attempt by a company or raider that the target company resists. For example, Company A is a publicly-traded company that wants to…
What is a Conglomerate Merger? A Conglomerate Merger is a union between companies that operate in different industries and are involved in distinct, unrelated business activities. Conglomerate mergers are divided into pure conglomerate mergers and mixed conglomerate mergers. The first type – the pure merger – is comprised of two companies that operate in separate…
What is a General Partnership? A General Partnership (GP) is an agreement between partners to establish and run a business together. It is one of the most common legal entities to form a business. All partners in a general partnership are responsible for the business and are subject to unlimited liability for business debts. What…
What are Drag Along Rights? Drag Along Rights (also referred to as “drags” or drag-along provisions) are rights that give the majority owners the right to force minority owners to join in the sale of a company. The rights give the majority owners the ability to sell the entire company based on the terms and…
What is an IPO (Initial Public Offering)? An Initial Public Offering (IPO) is the first sale of stocks issued by a company to the public. Before an IPO, a company is considered a private company, usually with a small number of investors (founders, friends, family, and business investors such as venture capitalists or angel investors)….
What is a Definitive Purchase Agreement? A Definitive Purchase Agreement (DPA) is a legal document that records the terms and conditions between two companies that enter into an agreement for a merger, acquisition, divestiture, joint venture, or some form of strategic alliance. It is a mutually binding contract between the buyer and seller and includes…
What is Reverse Morris Trust? The Reverse Morris Trust is a form of tax avoidance employed by companies. This tactic enables the company to sell off unwanted assets without incurring tax obligations on gains arising from the sale of these assets. The Reverse Morris Trust technique works in the following manner: a parent company spins…
