What is Reverse Takeover?

A reverse takeover occurs when a private company acquires enough shares of a listed company and in doing so, becomes a listed company itself. This process can bypass the lengthy, complex and expensive process of going public (undergoing an initial public offering, IPO).

The disadvantage is that the once-private company does not receive any additional funds through the reverse takeover and thus, it must have enough funds to complete the transaction on its own.

Reverse takeover is also known as “reverse merger” or “reverse IPO”.