The acquisition of a public company by a private company so that the latter can become a public company without having to go through the lengthy and complex process of a traditional public offering. Reverse takeovers have some advantages over initial public offerings (IPOs) including the considerably shorter timeline and the lower costs of registration (reverse takeovers do help private companies bypass the daunting underwriting process and avoid admission requirements). A reverse takeover requires that the new company issues new shares, hereby waiving the preemptive rights of existing shareholders. It can be executed with or without a formal merger.
It is also known as a reverse IPO or a reverse merger or for short as an RTO.
