A reverse takeover, reverse merger, or reverse IPO is the acquisition of a private company by an existing public company so that the private company can bypass the lengthy and complex process of going public.

What happens in a reverse takeover?

A reverse takeover (RTO) is a process whereby private companies can become publicly traded companies without going through an initial public offering (IPO). ... The private company's shareholder then exchanges its shares in the private company for shares in the public company.

Is a reverse takeover good?

A reverse merger is an attractive strategic option for managers of private companies to gain public company status. It is a less time-consuming and less costly alternative to the conventional initial public offerings (IPOs). ... A successful reverse merger can increase the value of a company's stock and its liquidity.