Valuing Tech Companies in M&A: Challenges and Techniques
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.