Going Private
Definition of 'Going Private'A transaction or a series of transactions that convert a publicly traded company into a private entity. Once a company goes private, its shareholders are no longer able to trade their stocks in the open market. Private equity firms will typically purchase a struggling company, make it into a private entity, reorganize its capital structure, and issue stocks once a profit can be realized. |
|
Investopedia explains 'Going Private'A company typically goes private when its stakeholders decide that there are no longer significant benefits to be garnered as a public company. Privatization will usually arise either when a company's management wants to buy out the public shareholders and take the company private (a management buyout), or when a company or individual makes a tender offer to buy most or all of the company's stock. Going private transactions generally involve a significant amount of debt.Companies are often taken private when they need time to restructure their debt or operations prior to becoming a public corporation once again. |
Related Definitions
Articles Of Interest
-
Why Companies Stay Private
Many private companies prefer to stay private and find alternate sources of capital. Find out what firms have to gain by eschewing the windfall from a flashy IPO. -
Looking For Profit In Privately-Held Companies
Private companies offer unique opportunities for those with the knowledge and resources to take advantage. -
Why Successful Business Owners Sell Out
Learn the motives that drive companies into the arms of an acquirer. -
If I reject the tender offer for acquisition of the stock that I own in a company and the company goes private, what happens to my stock?
Since the passing of the Sarbanes-Oxley Act, a significant number of public companies have chosen to go private. The reasons why companies make this choice are as varied as the companies themselves, ... -
How The Big Boys Buy
Learn what those in-the-know look for when acquiring a company. -
What Is Private Equity?
This investment vehicle attracts wealthy investors to increase the value of portfolio companies. -
War's Influence On Wall Street
Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common. -
Cashing In On Corporate Restructuring
Companies use M&As and spinoffs to boost profits - learn how you can do the same. -
Learn The Lingo Of Private Equity Investing
Because of the non-public nature of private equity, it can be difficult to the learn the lingo. We break it down here. -
How To Make $1 Million In Finance
The best opportunities to maximize sheer earning power are in investment banking, private equity and hedge funds. Find out what it takes to succeed in these ultra-lucrative areas of finance.
Free Annual Reports