The Essential Guide to Valuing a Company for M&A

A merger happens when two companies join forces in order to create a new company. An acquisition, on the other hand, represents the purchase of a company usually smaller in size by a larger one. In the event of acquisition, the target company is integrated and ceases to operate as a separate entity. This concept is essential owing to its effect on the way the target company will be valued and for what purpose. Valuation in M&A means the values relative of the selling firm(s) under reorganization aimed primarily to assist the negotiators in arriving at a transaction.