Alternative Public Offerings (APO)
Alternative Public Offerings (APO)
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Benefits to Target Company
Advantages of APO over IPO
Lower costs
Quicker process
No IPO window necessary
Less management attention required No risk of underwriter withdrawal Less dilution
No underwriter
APO Alternative Public Offering An Alternative Public Offering 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 typically requires reorganization of capitalization of the acquiring company.
Process In an APO (reverse takeover), shareholders of the private company purchase control of the public shell company and then 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. 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 Exchange Commission for reporting issuers. The disclosure is filed on Form 8-K and is filed immediately upon completion of the reverse merger transaction.
Process In an APO (reverse takeover), shareholders of the private company purchase control of the public shell company and then 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. 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 Exchange Commission for reporting issuers. The disclosure is filed on Form 8-K and is filed immediately upon completion of the reverse merger transaction.