[Ipg-smz] Asymmetrical Mergers

Wed Oct 23 15:34:55 UTC 2019

As some sort of compensation for my crypto-Trotskyite youth, I have *two*
daughters who work as M&A specialists.  In any case, yes, the formal
variations are MANY, but the central theme predictable, as Tom correctly
alludes: rewards to decision-makers.

On Wed, Oct 23, 2019 at 10:04 AM Tom Henderson via Ipg-smz <
ipg-smz at netpress.org> wrote:

> No, although some reverse mergers are between public/private
> organizations.
>
> Differential valuations sometimes have to do with stock locks, stupid
> warrant tricks, cross-covenants, all kinds of shenanigans.
>
> The very phrase "merger" is fraught with differing definitions. On the
> top, two companies combine assets. Underneath, how those assets are
> combined, depreciation(s), tax angles, countries/areas of jurisdiction,
> legal rulings, subsidiary bulk asset transfers, all these and more have a
> bearing on the perceived outcome by the people pulling the strings. Those
> same people orchestrate this for THEIR benefit, as
> stockholders/officers/happy-benefactors. Nothing less, nothing more.
>
> The previous citations here explain examples of it. Always look to the
> principal's outcomes for the rationale as to *why.*
>
> Tom
>
>
> On 10/22/19 5:24 PM, Perlow, Jason via Ipg-smz wrote:
>
> Reverse mergers are between a private company and a public company though,
> in which the private buys the public one. The scenario I am thinking about
> is two publicly traded companies but one has about 10X the valuation of
> another. But the smaller company has a market cap of $100B.
>
> On Tue, Oct 22, 2019 at 5:11 PM Tom Henderson via Ipg-smz <
> ipg-smz at netpress.org> wrote:
>
>> Reverse mergers are pretty commonplace. Usually, it's structure, assets,
>> cashcow-cashflow, management, international presence, etc that's the
>> motivator. I've been involved with two of them. Many work out well, but a
>> few of them are dodgy.
>>
>> Tom
>>
>>
>> On 10/22/19 4:28 PM, Perlow, Jason via Ipg-smz wrote:
>>
>> Good example
>>
>> On Tue, Oct 22, 2019 at 4:26 PM Steve Wexler <
>> stevewexler.wordslingers at gmail.com> wrote:
>>
>>> It wasn't a 10x acquisition, but Dell-EMC pushed the boundaries at least
>>> a little bit for the IT industry.
>>>
>>> On Tue, 22 Oct 2019 at 16:23, Perlow, Jason via Ipg-smz <
>>> ipg-smz at netpress.org> wrote:
>>>
>>>> Doesn't look great for the future of these things either
>>>>
>>>>
>>>> https://www.washingtonpost.com/business/the-leveraged-buyout-industry-is-starting-to-eat-itself/2019/08/06/3a01e192-b843-11e9-8e83-4e6687e99814_story.html
>>>>
>>>> On Tue, Oct 22, 2019 at 3:42 PM Dan Rosenbaum via Ipg-smz <
>>>> ipg-smz at netpress.org> wrote:
>>>>
>>>>> It sounds to me like you’re describing a classic leveraged buyout,
>>>>> where a smaller company uses a bigger company’s assets or cash to buy it.
>>>>> The classic case was RJR Nabisco.
>>>>>
>>>>>
>>>>>
>>>>> d
>>>>>
>>>>>
>>>>>
>>>>> *From: *Ipg-smz <ipg-smz-bounces at netpress.org> on behalf of "Perlow,
>>>>> Jason via Ipg-smz" <ipg-smz at netpress.org>
>>>>> *Reply-To: *<ipg-smz at netpress.org>
>>>>> *Date: *Tuesday, October 22, 2019 at 3:28 PM
>>>>> *To: *IPG List <ipg-smz at netpress.org>
>>>>> *Cc: *Jason Perlow <jperlow at gmail.com>
>>>>> *Subject: *[Ipg-smz] Asymmetrical Mergers
>>>>>
>>>>>
>>>>>
>>>>> Does anyone know, historically, of a merger between two companies
>>>>> where the valuation was highly asymmetrical? Such as when you might have a
>>>>> company that is worth $1000B, but wants to merge with a company that is
>>>>> worth $100B? They don't have the assets to buy it outright, but it would be
>>>>> a beneficial marriage.
>>>>>
>>>>>
>>>>>
>>>>> I am going by this list and I cannot find any that are comparable.
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> https://en.wikipedia.org/wiki/List_of_largest_mergers_and_acquisitions
>>>>>
>>>>>
>>>>>
>>>>> --
>>>>>
>>>>> *JASON PERLOW*
>>>>>
>>>>> Sr. Technology Editor, ZDNet
>>>>>
>>>>>
>>>>>
>>>>> *Voice/Text (561)510-0063 jperlow at gmail.com <jperlow at gmail.com> **ZDNet
>>>>> Tech Broiler: **www.techbroiler.com <http://www.techbroiler.com/>*
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>>>>>
>>>>>
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>>>>
>>>>
>>>> --
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>>>> Sr. Technology Editor, ZDNet
>>>>
>>>>
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>>>
>>>
>>> --
>>> Steve Wexler
>>> Wordslingers Ink
>>> 416-282-0091
>>> stevewexler.wordslingers at gmail.com
>>>
>>
>>
>> --
>> *JASON PERLOW*
>> Sr. Technology Editor, ZDNet
>>
>>
>> *Voice/Text (561)510-0063 jperlow at gmail.com <jperlow at gmail.com> ZDNet
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>>
>> --
>> Tom Henderson
>> ExtremeLabs, Inc.
>> +1 317 250 4646
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>
>
> --
> *JASON PERLOW*
> Sr. Technology Editor, ZDNet
>
>
> *Voice/Text (561)510-0063 jperlow at gmail.com <jperlow at gmail.com> ZDNet Tech
> Broiler: www.techbroiler.com <http://www.techbroiler.com/>*
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> Twitter: @extremelabs
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