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All Posts Term: What is a Reverse Merger
5 post(s) found

Marijuana Companies Tilray And Aphria Announce Reverse Merger Deal

Marijuana Companies Tilray And Aphria Announce Reverse Merger Deal

TilrayReverseMerger

Two of Canada's largest cannabis producers, Tilray and Aphria are joining forces in a reverse merger acquisition the companies have announced. The combined entity will adopt the Tilray name and be instantly positioned for market dominance in the Canada marketplace as well as allowing it to move swiftly into the developing US market should the legal position there change. Tilray and Aphria together control about 17% of Canada's retail marijuana market.

Tilray Stock Jumps

News of the Tilray reverse merger sent its stock soaring as it is expected to create the world's largest cannabis company by revenue. Tilray has a current market capitalization of $1.14 billion while Aphria's is $2.35 billion and the combined companies will have an equity value of around $3.9 billion.

The deal is expected to be completed in the second quarter of 2021 under the terms of which Aphria shareholders will own 62% of Tilray's outstanding shares. Based on their current stock prices the reverse acquisition of Tilray will deliver a 23% premium for Tilray shareholders.

The combined company is projected to have revenue of $685 million and the merger is expected to deliver about C$100 million (US $78.4 million) in cost savings within two years of the deal's completion. This is expected to occur as a result of synergies in the areas of cultivation and production, cannabis product purchasing and sales and marketing.

US Easing Marijuana Restrictions

The merger is timely as it strengthens the combined companies position to take advantage of the potential of easing of federal legalization on marijuana use in the US with the election of a Democratic president.

Analysts see reasons for and against the merger. On the positive side Tilray will get financial support while Aphria will now have a partner in German conglomerate Anheuser-Busch that could enable it to gain access to emerging European opportunities. Aphria also recently purchased US beer company Sweetwater Brewing that makes some cannabis infused drinks.

On the negative side, being bigger in Canada may not necessarily be good for Aphria because growing operations and brands are larger than Tilray's while the Canadian provinces want more local growers. This could make consolidation of these top cannabis players problematic.

Paysafe To Go Public In $9 Billion Deal

Paysafe Group Ltd (Paysafe) is an online payments firm that is backed by CVC Capital Partners and Blackstone Group Inc. It has announced that it will be going public through a reverse merger with Foley Trasimene Acquisition Corp, a firm led by billionaire William P. Foley II. Through the special purpose acquisition company (SPAC), it aims to raise $2 billion in a private placement to contribute funds for the transaction valuing the company at about $9 billion when complete. The cash component will be funded by $150 million of Foley's money held in trust.

Paysafe

Bill Foley will become chairman of the merged company's board with the current Paysafe CEO, Philip McHugh, expected to continue in his role. Foley has stated that he wants to position Paysafe as a leading global payments platform and that the deal will accelerate the operational transformation required to achieve that aim.

Biggest Announced Reverse Merger

The Paysafe reverse merger is one of the biggest announced this year and has attracted investors including Third Point LLC, Fidelity National Title Insurance Co, Suvretta Capital Management and Hedospophia among others that will participate in the private placement. The current Paysafe shareholders (consisting of its private equity backers and management) will continue to be the largest shareholders in the merged company.

What Is Paysafe

Paysafe, based in London, offers payment processing services that allow companies to accept payments in a range of ways including cash, credit cards and direct debits online as well as offering prepaid cards and digital wallets. It is unique in that it functions both as a consumer and merchant network whose purpose is to enable businesses and consumers around the globe to perform seamless payment transactions and currently processes some $100 billion annually. It works with payment solution brands including Paysafecard, Income Access, Skrill and Neteller. The company was bought in 2017 by Blackstone Group and CVC Capital Partners in a deal that was worth around $4 billion at the time.

3D Printer Manufacturer Zortrax To Go Public In Reverse Merger

3D Printer Manufacturer Zortrax To Go Public In Reverse Merger

Zortrax

Zortrax, the Polish 3D printer manufacturer, has signed a reverse merger deal with Corelens, the optical medical firm, that will enable it to be a publicly-listed company on the Polish NewConnect stock exchange.

The deal means that all of Zortrax's assets will be transferred to Corelens which will issue 97 percent of its shares to Zortrax shareholders in exchange. This will enable Zortrax to expand on the medical applications of its systems and after the merger it will have a value of $39.6 million.

Zortrax Product Lines

Based in Olsztyn, Poland, the company specializes in manufacturing desktop 3D printers as well as offering a variety of post-processing, printing materials and software solutions to its customers. The company markets its products through a network of 130 partners in 90 countries to service industries ranging from automotive design and architecture to the textiles sector.

An example of a recent application of the firm's 3D printing technology is the German company Lightning Cosplay which used Zortrax's M200 printer systems to fabricate video-game inspired cosplay outfits. The company has also developed a range of bio-compatible resins (under the Inkspire label) that is aimed at the growing popularity of medical desktop 3D printing.

Zortrax Reverse Merger

In order to capitalize on the growth in demand for these type of applications (and to enhance the medical compatibility of its printers) the company has opted to merge with the clinical firm Corelens as a good strategic fit. As an added benefit it could also raise a significant funding by floating its shares on the stock exchange, depending on the company's future financial results and the confidence of its investors.

The reverse merger will result in Corelens issuing Zortrax's investors with approximately 111,937,500 shares which represent the equivalent of 97 percent of the company. Fifteen new Corelens shares will be issued in exchange for each Zortrax share to the company's existing shareholders so that they retain the same percentage of ownership in the new company that they had before.

Newegg (N) Reverse Merger

Newegg (N) Reverse Merger

NewEgg

The proposed Newegg (N) reverse merger plans to offer a stock worth $30 then convert its name to Newegg Commerce under a new Nasdaq symbol ticker to N. The reverse merger book-runner being Maxim Group.

Here are some critical elements of the merger:

• Newegg mergers with Lightning Delaware, a subsidiary of Lianluo Smart Limited
• Lianluo expects to terminate some of its warrants and Class B common stock that will be exercisable to Newegg Commerce stock
• The company's name will be changed to Newegg Commerce, together with its stock ticker.
• What remains constant is the stock trade name Nasdaq.

Reverse merger as a strategy comes with several benefits. As much as it involves more of a reverse takeover, the merger will create a chance for the company to achieve public financing.
The publicity will also be felt both in the ordinary and stock market. Having common shares in the market will create an opportunity for the business to succeed.

How Newegg benefits from the reverse merger

• With the merger, Newegg will operate at a lower cost as compared to initial public offerings.
• It offers a less time-consuming option. To go public, time and money are needed. This is why reverse merger offers the best option.
• With the merger, the company will be able to enjoy flexibility in financing and liquidity. The financial alternatives that come with the merger attract more investors in the process.
• There will be an increased value of the company's liquidity and stock when Newegg reverse merger is actualized. The shares and numbers in the stock market will improve in the process.
• The merger allows for additional compliance within the company. This means sufficient time and energy will continue to run, and the business grows in the process.

Recent Reverse Mergers From NYSE to Turner Advertising Company

Recent Reverse Mergers From NYSE to Turner Advertising Company

NYSEgroup

When American companies decide to go public, they have to go through an Initial Public Offering (or IPO). This is a lengthy and expensive process that takes months, perhaps longer than a year. Audits, investigations, legal fees and many other factors play into an IPO and not everyone is willing to undergo this. That’s when reverse mergers come into play: A reverse merger is a process where a private company acquires a publicly-traded company to bypass issuing an IPO and becoming a public company faster. There are a lot of companies that have used this method, both successful and not.

NYSE

The most well-known case of a reverse merger happened on December 6, 2015. The New York Stock Exchange (or NYSE), a business with over 200 years’ worth of history, decided to merge with Archipelago Holdings, an electronic trading company. The sole objective of this merger was for the NYSE to become a public traded company. Four months later, on March 2016, NYSE became the NYSE group and Archipelago Exchange turned into its subsidiary under the name NYSE Arca.

This reverse merger proved so successful than less than a year later the NYSE group completed another merger, this time with Euronext. The result was NYSE Euronext, a transatlantic stock exchange, the first of its kind.

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