VR Mergers & Acquisitions / VR Business Brokers located in Austin, Texas

How Do Mergers & Acquisitions Work in Texas?
Texas law allows business owners the freedom to reorganize corporations in various ways as they choose. Possibilities include merger, acquisition, share exchange, disposition of assets, conversion, or formation of a close corporation. The Texas Business Corporations Act protects shareholders by giving them the right to be paid for their shares of stock if they dissent to the merger.

What is a Merger?
A merger occurs when one corporation is combined with and disappears (or merged) into another corporation. Or a new corporation may be formed from two existing corporations. In Texas, all corporate mergers are statutory mergers, since all mergers occur as specific formal transactions in accordance with the laws, or statutes, of the states where the companies are incorporated. Who controls or operates the company after the transaction has no relevance on whether a merger has occurred or not.

What is an Acquisition?
An Acquisition is any process where the stock or assets of a corporation are acquired by a purchaser. The transaction may take the form of a stock purchase or an asset purchase.

What's the difference between a Merger and an Acquisition?
An Acquisition is the generic term used to describe any transfer of ownership, even if the acquired company continues as a separate legal entity. Merger is a technical term for a particular legal procedure occurring after an acquisition, when one corporation merges into another.

What is a Leveraged Buyout?
In a Leveraged Buyout (LBO), a company's stock or assets are purchased largely with borrowed money, resulting in a new capital structure: a high percentage of debt secured by the assets of the acquired company.

What is an Earnout?
An Earnout is a method of compensating a seller based on the future earnings of a company. It is the contingent portion of the purchase price. A common type of earnout provides for the seller to receive additional payments if the earnings of the business exceed agreed-upon levels. Another type of earnout may allow the buyer to pay off the seller early if earnings exceed agreed-upon levels.

What are the different forms of transactions?
There a three general types of transactions in the acquisition of a business; Asset Purchase, Stock Purchase and Merger.

What is an Asset Transaction?
The acquired company transfers the assets of the business to the purchaser. These could include equipment, inventory and real estate. It may also include intangible assets such as contract rights, leases, copyrights, patents, trademarks, etc. The acquired company executes the specific types of documents necessary to transfer the assets, such as deeds, bills of sale, and assignments. The buyer usually benefits from the tax attributes which this type of transaction generally contains.

What is a Stock Transaction?
Instead of assets, the purchaser acquires the shares in the corporation in exchange for an agreed-upon payment to the seller. A Stock Transaction is appropriate when tax costs, risk considerations or other issues surrounding an asset transaction make a Stock Sale more appealing to the parties.

Why VR M&A?
VR Mergers & Acquisitions fills the void in Austin between general business brokerage and the investment banking community. Specializing in mid-market transactions valued between 2 and 15 million dollars, VR M&A provides its clients with access to a network of highly trained professionals that, by virtue of being part of the VR network, have the resources required in this specialized market. VR Mergers & Acquisitions has forged strategic alliances with the world's top investment banking firms, enabling us to provide our clients access to a lucrative network of qualified, professional buyers worldwide.

Please contact VR Mergers and Acquisitions - Austin, Texas for any questions.