Celler-Kefauver Act
What is the Celler-Kefauver Act? The United States Congress passed the Celler-Kefauver Act in 1950 with the goal of strengthening the provisions of the Clayton Antitrust Act of 1914. Specifically, the act was enacted to seal a loophole in the Clayton Act regarding certain forms of mergers and acquisitions. While the Clayton Act outlawed horizontal...
Use of Proceeds Statement
What is the Use of Proceeds Statement? The use of proceeds statement is a short document that summarizes how a company that aims to secure additional capital is going to spend the funds. In other words, the document provides the reader with a snapshot of what aspects of the business the company will spend money...
Direct Listing
What is a Direct Listing? A direct listing is a process by which a company can go public by selling existing shares instead of offering new ones. Companies that choose to go public using the direct listing method usually have different goals than those that use an initial public offering (IPO). Direct Listing vs. Initial...
Offering Price
What is the Offering Price? The offering price is the per share price of publicly issued securities set by an underwriter and at which the shares are available for purchase. Although the term is mostly used in the context of the issuance of shares, it is also applicable in the issuance of other securities, including...
Dead Hand Provision
What is a Dead Hand Provision? A dead hand provision is a type of poison pill that massively dilutes the shares of the target company during a hostile takeover attempt. When an acquirer buys a stake in the target company, rights automatically issue, allowing the shareholders of the target to buy newly issued shares at...
Limitations on M&A
What are Limitations on M&A? Mergers and acquisitions are often used in non-financial debt covenants by lenders with the intention to avoid any significant impact on cash flow on the part of the borrowing party that may or may not affect their ability to pay back the loan. Hence, by putting limitations on mergers and...
Negotiated Sale
What is a Negotiated Sale? A negotiated sale is a sale of bonds that is an alternative to the competitive bidding process in which multiple interested parties place their bid terms with the aim of beating other bidders and emerging the winner. It is sometimes preferred over competitive bidding due to its speed, flexibility, efficiency, and...
Staple Financing
What is Staple Financing? Staple financing is a financing package arranged by a seller for potential purchasers as part of an auction process. It is organized by the seller and their financial advisors, and it comprises the principal, fees, and the loan covenants. The term “staple” is derived from the fact that the commitment letter...
Pitchbook
What is a Pitchbook? A pitchbook is a sales book used by investment banks to sell products and services, as well as to pitch potential clients. The purpose of a pitchbook is to secure a deal with the potential clients. It provides an overview of the firm, including historical information, financial strength, and services available...
Deal Origination
What is Deal Origination? Deal origination, also referred to as deal sourcing, is a process used by finance professionals such as investment bankers, venture capitalists, and corporate development professionals to identify investment opportunities in the market. The goal of deal origination is to ensure a large volume of deals is obtained in a given period to maintain...
