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Aspiring Lawyers - Interviews & Vacation Schemes
Interviews Discussion
Acquisition financing
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<blockquote data-quote="Dheepa" data-source="post: 54404" data-attributes="member: 1572"><p>No such thing as a dumb question on this forum! ☺️</p><p></p><p>Equity financing generally means that a company is choosing to sell a stake/part of its shares to raise money. If I remember correctly, the M&A course on TCLA is merely referring to the ways in which the buyer can choose to raise money (debt/equity) for the acquisition, but generally you can understand the term equity financing both from the perspective of the buyer and the seller.</p><p></p><p>Buyers using equity financing for the acquisition may either be selling a direct stake in the shares to investors or could choose to do an IPO listing (which is also a sale of shares, just on a public share market). For the target company, the sale of part of their shares, or maybe all of their shares is also in a sense equity financing, because they too are raising money through that sale of shares.</p><p></p><p>The thing to remember is that equity financing isn't something companies look to do just for an M&A transaction. Companies sometimes want to raise money through a sale of shares simply because they would like to reinvest that money into the business.</p><p></p><p>I hope that makes sense let me know if you need any more clarification.</p></blockquote><p></p>
[QUOTE="Dheepa, post: 54404, member: 1572"] No such thing as a dumb question on this forum! ☺️ Equity financing generally means that a company is choosing to sell a stake/part of its shares to raise money. If I remember correctly, the M&A course on TCLA is merely referring to the ways in which the buyer can choose to raise money (debt/equity) for the acquisition, but generally you can understand the term equity financing both from the perspective of the buyer and the seller. Buyers using equity financing for the acquisition may either be selling a direct stake in the shares to investors or could choose to do an IPO listing (which is also a sale of shares, just on a public share market). For the target company, the sale of part of their shares, or maybe all of their shares is also in a sense equity financing, because they too are raising money through that sale of shares. The thing to remember is that equity financing isn't something companies look to do just for an M&A transaction. Companies sometimes want to raise money through a sale of shares simply because they would like to reinvest that money into the business. I hope that makes sense let me know if you need any more clarification. [/QUOTE]
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