Public vs. Private M&A Deals


A private M&A deal can be defined as one with a seller that is clearly identifiable. The public deal is done with a company that generally has an array of shareholders.


The biggest difference between private and public M&A transactions is whether or not the seller stands by his or her obligations post-closing. With a private company, if the buyer discovers something that the seller neglected to inform the buyer about (such as debts), then the buyer can hold the seller financially responsible. With a public company, however, it would be impossible to request compensation from a multitude of different shareholders. But a buyer may be able to acquire target shares.


Another difference between doing an M&A deal with public and private businesses is that the public deal must be approved by the shareholders. This can slow down the process. With a private company, the upper management are the only ones involved in the M&A process.


On the other hand, a public company will have their business data available to the public and easily accessible, while a private company will not.


No type of deal is necessarily better than the other. It depends on what the buyer finds important in conducting a transaction. When selling a business, there are many aspects that should be dealt with by a professional to get the best deal for your business. Contact one of the professionals at George & Company today.