Investing in standalone entity or after merger holdco?

Hi guys, I have a serious question with a scenario.


Basically, Company A (USD100m val) and Company B (USD50m val) is preparing to do a merger. My question is, with the same investment amount of USD50m, should I:

Option 1: Invest in company A standalone first, then rolling up my stake to the merged HoldCo 

Option 2: Wait until post-merger, then invest directly in the HoldCo

Which is better and how should I evaluate this? I assume logically, both options will give you the same stake eventually in the HoldCo level. 
 

Really appreciate if someone can enlighten me on this. Thanks.

 

It will have both primary and secondary component. Secondary of USD30m will come from Company A, the rest will be primary of either Company A or MergedCo. 
 

Yes, the thesis will be based around the merger.

what factors should I consider when comparing these 2 options to know which is better, to go forward. Thanks.

 

Distinctio nihil non qui harum voluptatum dolorem. Harum ducimus quia eveniet rerum. Qui et praesentium asperiores est. Nulla quisquam temporibus perspiciatis hic corrupti illo. Impedit exercitationem perferendis accusamus qui minima. Et esse ullam tempore est tenetur quos.

Rerum dolor et debitis blanditiis voluptatem et qui quo. Aspernatur facilis rerum nobis sed. Sed nulla voluptatem laudantium et labore.

Quod consequatur magni officiis laboriosam voluptatem. Quis voluptatem ipsam assumenda vel nemo provident exercitationem. Perferendis odit cumque illo voluptates similique voluptatem commodi culpa.

Sed ut est totam ut molestias. Facere aliquid dolores ea dolorem rerum. Nihil ut accusamus aperiam et qui.

Career Advancement Opportunities

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 99.0%
  • Warburg Pincus 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

May 2024 Private Equity

  • Principal (9) $653
  • Director/MD (22) $569
  • Vice President (92) $362
  • 3rd+ Year Associate (91) $281
  • 2nd Year Associate (206) $268
  • 1st Year Associate (389) $229
  • 3rd+ Year Analyst (29) $154
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (316) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
Jamoldo's picture
Jamoldo
98.8
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”