Top Industry Sectors Performing Reverse Mergers
Every industry has examples of completed reverse mergers. Some are good examples. Some are bad. From each successful and failed example, we can learn something of what works and what should be avoided. Among recent clients are those in the following industries and sectors. Each of the industries listed below includes companies with whom we’re in current discussion for either direct or alternative public offering assistance.
Healthcare, Pharma & Biotech
Healthcare devices; pharmaceuticals and biotech are all areas where we’re seeing an increased interest. We’ve also seen a recent surge of reverse merger interest in the medical devices category. Promising prospects with FDA approval looking to raise money and expand.
There are some great examples of biotech wonders in the reverse merger world. The world’s richest doctor is one great example. Where Intellectual Property and regulatory approval has been granted to a particular public company, the likelihood of a successful reverse merger remains high. We’re currently in process of working with a couple of such firms.
Technology, Software & Internet
A large majority of the project leads we’re currently facilitating are in various areas of technology including software (traditional & SaaS), custom hardware components and internet technologies. Each of these markets include high-growth prospects that are attempting to circumvent the traditional venture capital route of funding by performing a reverse merger.
The risk involved in such technology plays is that lack of proper financing coupled with the rapidly changing technology environment, companies are often left with good ideas, but are unable to compete with some of the larger players in growing niches in tech. This is true unless of course they plan on positioning themselves as M&A candidates for some of the larger firms on an M&A-spree.
Oil & Gas Exploration
While the oil and gas markets have seen significant decreases in value over the last couple of months, there is currently significant interest by some firms who’re looking to perform industry consolidation using public stock as consideration. The timing is right as many such firms are significantly struggling with the downturn in the oil & gas market.
Entertainment
The entertainment industry, including music and video production, are always in need of financing. This is one of the main reasons they like to use the APO as a method for providing capital and expanding their presence. Rights to particular songs, artists, shows or copyrights makes it a bit easier to have a story or reason to take a company public.
Each of these industries has their own associated risks. The gas industry, in particular, has been significantly hard-hit by the recent drop in oil prices. The reverse merger market often reflects some of the startup ideas of the more broad VC world, but includes some less sophisticated opportunities like those in real estate and energy. Of the dozen or so firms with whom we’re currently working, they all fit within these various markets.
- Covid-19 Impact on US Private Capital Raising Activity in 2020 - May 27, 2021
- Healthcare 2021: Trends, M&A & Valuations - May 19, 2021
- 2021 Outlook on Media & Telecom M&A Transactions - May 12, 2021
