[Vishal Patel]

What type of acquisition is easier between a publicly traded or privately owned organization and why?

[Jianxiong Zhang]

A privately owned organisation acquisition is easier.

This is due to:
1.) Less interference from board members/shareholders
2.) Straight forward transaction
3.) Tend to deal directly with business owners and lessen chain of communication

[Manish]

This will be dependent on a number of factors such as if the stock is widely held, are there majority shareholders, is the company in distress and what regulatory approvals are required? A privately held company with a single shareholder might be more challenging if the price they demand is not reflective of fair value, compared to a public company that may or may not be widely held but where the board has a fiduciary duty to evaluate an offer.

[Lisa Hall]

Other factors to consider include the goals and complexity of the integration after the acquisition is approved.

[Lana Ilchenko]

I think there are complexities in each type of company. For example, in some countries private companies don’t have to make their accounts publicly available, making an initial approach that much harder and due diligence potentially longer. One may end up doing quite a bit of expensive work with an offer being rejected due to inflated expectations by the current owner. The cultural integration may also be more complex, especially if acquired by a public company.
On the other hand, acquiring a public company will be ‘very public’, so to speak, with more regulatory and market scrutiny, which can damage both companies if doesn’t materialize or succeed.

[jay]

Private companies have less red tape to navigate. They still have to navigate the same complexities when doing due diligence for strategic, cultural, and financial alignment.

[Mark Hassell]

I tend to agree with Lana’s response above. Each case presents it’s own set of complexities. For example, with private companies, I have seen relatively simple transactions fall apart due to a blocking shareholder.

[Della]

Legislative and/or regulatory factors also contribute to the ease of acquisitions, for example, where entities are regulated by a Central Bank and certain statutory approvals are required by the acquirer.

[Author]

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