6 Reasons M&A Deals Fail

Merging with, or acquiring, another entity is always going to be a risky venture no matter how extensive the negotiations and due diligence process are. As with any major purchase, issues may not be clear until after the fact, and a lot of things can happen once everything is already said and done that may end up destroying any potential value before it is even realized. Here are six common reasons that M&A deals fail:

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What Is a Merger Arbitrage?

When it comes to investing, few strategies theoretically have as few risks as arbitrage. This term refers to when financial assets are purchased in one market and immediately resold in another market in order to exploit and benefit from discrepancies between the two prices.

One special form of arbitrage that's used by investors during an M&A deal is a merger arbitrage (also known as a "risk" arbitrage). So how exactly does a merger arbitrage work, and what are the upsides and drawbacks?

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What happens to stock when a company gets acquired?

It is fairly common for both small and large companies to merge with and acquire other firms to gain a competitive edge. Although mergers and acquisitions are often considered together, the end result is obviously slightly different. Mergers tend to occur when both companies are on more equal footing, and many of the attributes of each company are retained post-merger to maximize the results of the integration. On the other hand, acquisitions usually involve a larger company purchasing another company, with some aspects of the smaller company remaining and others likely being changed to suit the needs of the acquiring company.

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M&A: A Look at Accretion/Dilution Analysis

Companies engage in mergers and acquisitions for various reasons, such as to eradicate or join forces with a valuable competitor, capitalize on a strategic advantage within a niche market, or combine people-power and resources to revolutionize an industry, among other business-minded intentions. Regardless of the actual reason a merger or acquisition is pursued, it is fairly evident that the primary endgame is to maximize a company’s value. Granted, there is no hard and fast way to calculate or define value, and true value is not necessarily just financial in nature.

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Should your Startup Make a Pitch Video to Get Funded?

Securing funding can be quite difficult to accomplish, and there is a lot of fierce competition among the many startups that are seeking capital at any given moment. Finding interested investors and then convincing them to fork over funds requires an enormous amount of time and patience. Most startup founders are likely familiar with the importance of a polished pitch deck that will clearly yet succinctly elucidate the reasons that investors should provide some money to fuel their company’s growth.

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The Advantages and Disadvantages of a Reverse Merger

Thanks to their speed and cost-efficiency, reverse mergers are often the method of choice for private companies to start being traded publicly without performing an initial public offering (IPO). Whether you're considering a reverse merger for your own organization or you just want to learn more about the process, here's an overview of everything you need to know.

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Biggest IPO’s of 2017

For most startups, one of the main goals is to take the company public when the time is right. This year, it seems that the startups that went public and were expected to knock it out of the park failed to do so, whereas some of the lesser known names ended up killing it. Here is a brief look at the notable IPO activity that occurred this year:

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Top M&A Deals of 2017

Mergers and acquisitions have maintained a steady pace this year, and some big name companies have been looking to make strategic acquisitions in order to expand their market base. Of course, when two big companies seek to become one, there is a higher likelihood that the U.S. Department of Justice will challenge the validity and legality of the deal, as has happened with AT&T’s efforts to purchase Time Warner. Despite the financial and strategic benefits of joining forces with another large entity, the threat of eliminating competition and price increases often makes investors, analysts, and particularly consumers a bit nervous. Nonetheless, these are some of  the impressive deals that have closed this year.

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5 Common Fundraising Questions Answered

Starting a business may not require a ton of money outright, but growing it likely will. For startup founders focused on building a company from the ground up, the idea of fundraising is no doubt a bit overwhelming. It is hard enough to keep things running when there are limited resources, and there simply may not seem like time for the often arduous fundraising process. Given that fledgling entrepreneurs probably have a lot of questions before they can delve into the process and not much time to spend researching, here is a look at some of the common questions answered.

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M&A: A look at Conglomerate Mergers

There are different reasons that companies pursue a merger with another entity, and thus different types of mergers that can occur. A common but slightly more complicated type is the conglomerate merger. Simply defined, a conglomerate is a heterogeneous mixture of one or more elements, materials, or items. Thus, a conglomerate merger involves the merging of two or more entities that are engaged in dissimilar kinds of business or that focus on discrete commercial activities. Here is a look at the two types of conglomerate mergers and the pros and cons of this sort of transaction.

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