A lot of small businesses and companies are being established this days and they have a variety of functions in our society. But most of them cannot thrive in this harsh economy we live in now and as a result, most of them end up being failed and they whole structure collapses. This doesn't make sense at all, as most of the information, data, capitals and other resources become lost and redundant.
This is where the Mergers and Acquisitions (M&A) comes into play and a successful business or institution will purchase this company and take over all their assets as well as their resources to prevent the total loss of them. This process will promote the growth of the related sectors and give it an opportunity to achieve goals that cannot be done alone.
For example, a Food Industry will have the dire need to create a Microbiology lab for testing of the processed foods, but to build the lab and employ the necessary staff will be too costly and may incur loss for them. In order to prevent such, they will usually have to sell a part of their company to a bigger corporation in which the both of them will now set out to create this Microbiology lab for the progress of thee venture.
Problems that Affects THE Merger and Acquisition Market.
The M&A process isn't easy to implement due to a number of flaws and errors and they include
Inability To Get a Favourable Pricing Deal - this is one of the core factor that hinders a M&A deal as its hard for a buyer and seller to come to a good pricing conclusion. Not a single of the parties wants to feel cheated in the transaction as they buyers are so sceptical about overpaying for the deal and the seller do not want to feel underpaid. This has been a very great reason why a lot of this M&A deals fail as this process take a lot of time just to settle at the best price.
Inefficient Methods of Searching for a Potential Seller or Buyer - Presently, there is a very ineffective method for a common ground where the M&A participants can connect and find each other easily for the deal to be made. Some sellers can spend a very long period of time searching for a very potential M&A buyer that can match their specifications and have common goals in mind. Due to this constraint, there resort to the use of third parties and professionals to handle this task for them. So with the inclusion of this third parties, they will now have to incur more expenses as well as a waste of time and resources.
The High Fees of Transactions - For a M&A transaction to be successful, there is a lot of third parties which include the stream of lawyers, bankers, accountants, advisors and so on. This now leads to a very high and exorbitant M&A fees and due to the long duration of the deal to take place, it can be very bad to any of the both sides.
Intellectual Property Challenges - Intellectual property (IP) is a category of property that includes intangible creations of the human intellect, and primarily encompasses copyrights, patents, and trademarks. It also includes other types of rights, such as trade secrets, publicity rights, moral rights, and rights against unfair competition (Wikipedia)
A lot of issues are being encountered when dealing with Intellectual property in M&A deals and this is usually due to reasons such as a very vague and opaque IP market which prevents businesses and institutions to utilize their resources when tackling it. There is also the issue of users undervaluing the IP thereby alleviating the needs to involve a third party.
All the above issues were solved by the implementation of a platform called the LEXIT Platform.
What is the LEXIT Platform?
The LEXIT Platform is a platform that rose to address all the pressing issues that plague the M&A transactions, and gives way for numerous business and institutions to be able to reap its benefits. The platform comprises of a Marketplace and a Deal Room, and its powered by the blockchain technology.
The Marketplace is an arena created by the LEXIT platform that gives the sellers an opportunity to advertise and auction their companies and IP. For a seller to be able to advertise his or her company, they have to pay tiny listing fee. After this, then buyers can then scroll through each listing to see which one suits them or by using search parameters that narrow offers with unique properties such location or sector. In this marketplace, the buyers will have the opportunity to contact and communicate with the sellers to have more details about the project before they start their negotiations.
So when a buyer makes an offer and its accepted by the seller, they then proceed to complete the transaction in the Deal Room phase.
The Deal Room is where the M&A deals are being concluded on. This includes the non disclosure agreements, terms and conditions, negotiations as well as finalization of the deal. This room is very confidential as most of this information shared here are very confidential and are usually trade secrets. The only participants allowed here are the buyer, seller and other invited professionals.
The application of blockchain technology into this platform has its advantages which include
- The decentralized nature of the blockchain makes the storage of users data to be very secure and impervious to external breach especially deals that takes place in the Deal room.
- With the use of smart contracts, all transactions that take place on the platform are usually automated and users have no reasons to fear any case of breach of trust.
- With the smart contracts also, there will be the elimination of third parties, hence the reduction of costs.
- It will ensure a faster transactions time than deals done traditional ways.
Video Credit - LEXITco YouTube channel
Conclusion
Thus, the coming of the LEXIT platform will aid a better M&A transactions that will be of a great benefit to buyers and sellers with the use of the decentralized nature of the blockchain as well as the unique feature of the platform.
For More information on Lexit
Website: https://www.lexit.co
Whitepaper: https://uploads-ssl.webflow.com/59f21153ffa06300013c0c6d/5b3e5e84aa9722a12cd6e3df_07-05LEXIT_White_Paper.pdf
ANN Thread: https://bitcointalk.org/index.php?topic=2494585.0
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