Mergers and acquisitions is the number one choice for strategic increase in many organisations, it plays an important role to the growth, achieving the goals of the business in profit making and the overall market dominance of the business not forgetting longevity of the business life span. The activity of Mergers and Acquisitions are rising increasingly across the globe and this has brought about an inorganic growth that has lead to the maximization of the business shareholders value.
Mergers and Acquisitions has been in existence way back 1895 in the United State and 1920 in Europe, but it is relatively new to the developing countries most especially in Africa.
The word mergers and acquisitions encompasses several activities that has to do with the stake gotten from acquisition and the control of various assets of different businesses. Before merger and acquisition takes place in any given situations there are different motives behind it most especially in the case of corporate organisations. This article will show us how LEXIT has come to revolutionise the current system of mergers and acquisitions by proffering better solutions to the challenges face by the current system with the aid of decentralising it and bringing an increase to the liquidity and efficiency needed for all transactions in the M&A industry.
Mergers and acquisitions are often made use of by the corporate organisations, conglomerate and gigantic businesses due to some reasons . Some of the significant reasons behind mergers include the following:
M&A faces series of challenges and these have been limiting the potentials of the industry to thrive in todays economy. Big buyers and sellers are not readily and available and even when they are available they cannot easily transact due to the complex system that is in place before any transactions can be carried out. They are also faced with the challenge of not having the right resources or connections which is also a bother to the current M&A system. Below are some of the current challenges found in the M&A environment;
Difficulties In Pricing: Due to the nature of M&A, where a valuation of the asset in question is carried out. Buyers and sellers tend to have difficulties agreeing to a fixed price. Most times sellers wants the price inflated or feel the asset are under valued while, buyers feels the price of the assets is over valued and feels in most cases they are over paying and as a result this posses a serious challenge to the complete execution of the transaction.
Counterparties and Experts Are Not Easily Accessible: Transactions are usually affected in this case as it depends on both parties needs the services of experts to help guide the process, most times the services offered are time wasting as the search for counterparties are dependent on the address book of the participants. These is usually time consuming and tedious causing a serious challenge to the M&A.
Transaction Costs Are High: High transaction cost deters buyers and sellers from transacting especially in the case of small businesses and start-ups. These cost are due to the time constraint and numerous professional charges accrued on each transactions, charges like lawyers fees, accountants and other professionals needed for the transaction to be carried out successfully.
Intellectual Property Challenges: It is also important to note that intellectual property challenges serves as a barrier to The current M&A system, the inability to determine the value of some asset due to it intangible nature and inscrutable nature. Intellectual properties are said to be hard when it comes to determining their worth during M&A transactions.
LEXIT, plans to change the current system of the M&A sector that is old and archaic to the 21st century through the following ways;
Bringing both buyers and sellers together in one environment (marketplace) and providing an opportunity for them to enjoy global access to assets
Employing qualified assessors who will give the true and exact value of the asset in question Providing an ideal ecosystem where buyers and sellers can actually feel relax to finalise their transactions without problems
LEXIT with it wide range of connections will provide a network of business partners internationally that will help promote communication LEXIT with the aid of blockchain technology will provide a more transparent and secured atmosphere for transactions
Using the LEXIT tokens to reward participants, motivate them and drive further engagement.
The LEXIT ecosystem comprises of the market place, deal room and the use of blockchain technology to tackle the current challenges faced by the M&A market. The Ecosystem will stand as a point for interactions between buyers, sellers, experts, external partners and the LEXIT global partners. For the purpose of this review, we are going to take a look at the architecture of the LEXIT ecosystem and the purpose it serves.
THE LEXIT GLOBAL MARKET PLACE: LEXIT is launching the first global market place, a platform that will cater the needs of buyers searching for assets and for sellers to be able to create an auction listing for their companies. This market is open to all sellers with just a little fee in case the sellers wants to list their assets on the platform.
THE VIRTUAL DEAL ROOMS: This is a virtual environment where all the negotiations, deals, agreements signed and sealed. Its a is secured spaces that will hold confidential documents that contains the trade secret for any transaction. The only participants to gain access to the virtual deal room are the relevant buyers, sellers and selected experts known as the assessors.
BLOCKCHAIN TECHNOLOGY: the role of blockchain technology cannot be over emphasis when it come to LEXIT ecosystem, as LEXIT intends to use the blockchain technology to create trust between buyers and sellers. With the aid of the blockchain smart contract will automatically self-execute all transactions thereby cutting out the need for third parties. All transaction on the LEXIT ecosystem will be transparent, secured and stored on a tamper-proof with the aid of smart contracts.
LXT is the only currency that will be use in the LEXIT ecosystem, it will serve as a powering tool for the platform and will be used for escrow payments, rapid settlements and cross-jurisdictional transactions between the buyers and sellers who don’t know each other and have never met before.
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