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.

 

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