Reverse merger

A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.

A reverse merger (also known as a reverse takeeover or reverse IPO) is a way for private companies to go public, typically through a simpler, shorter, and less expensive process. A conventional Initial Public Offering (IPO) is more complicated and expensive, as private companies hire an investment bank to Underwrite and issue shares of the soon-to-be public company. Aside from filing the regulatory paperwork - and helping authorities review the deal - the bank also helps to establish interest in the stock and provide advice on appropriate initial pricing. The traditional IPO necessarily combines the go-public process with the capital raising function.