Buying A Business

Business acquisitions or mergers are one way to increase the size of a company. Both actions are meant to build a bigger company from two separate entities.

Business Acquisition Vs. Merger

An acquisition and a merger are very similar. The differences lie in the intent and the tone of the transaction. The intent of a merger is to combine two companies into a single, larger company. The companies involved are often similar in size and offer the same or related services. The merger is seen as a way to benefit both companies equally.

In an acquisition, some parts of the purchased business are maintained while others are sold off, leased or shut down. In this way, the buying company gains from the transaction by allowing it to increase its size and efficiency without building a whole new company. This type of transaction is meant to benefit the purchasing company at the expense of the purchased company.

In general, a friendly transaction is considered a merger while a hostile or surprise takeover is considered an acquisition. This is true even if the intent of the takeover is more like one or the other. For example, an acquisition in which parts of the purchased company are sold off may be called a merger if both businesses feel they will profit from the deal, or if they want to promote the appearance of a friendly transaction.

Prospective buyers can contact RPI Commercial, a full-service business brokerage, for more information on buying or leasing businesses. Questions can be answered via email at info@rpicommercial.com. Queries can also be answered by phone at 1-877-549-5210.