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January 2019 Archives

Red Hat to merge with IBM

California investors who own shares of Red Hat were invited to vote on a proposed merger with IBM. Roughly 141 million shareholders voted to approve the $34 billion proposal. The proposed deal is for $190 per share, which was about 60 percent more than what shares were valued at when it was announced in October 2018. A regulatory filing revealed that the shares were worth about $175 when the vote was taken.

Health care industry mergers on the rise

Some of the largest mergers in California and across the country are those affecting health care companies. Since 2008, the size of businesses for sale in the sector has grown annually by 13.8 percent. In 2018, the average valuation of a business for sale in the industry was $409 million. Hospital and health care mergers are a hot topic, with consolidation in the industry moving forward as smaller partners look to increase earnings.

The basics of choosing to become a limited liability company

From hiring the right employees to attracting customers, new business owners in California typically have an assortment of things on their to-do lists. Another important consideration for entrepreneurs just launching a new enterprise is how they'll opt to classify their business for legal purposes. While there are several options available, one of the least complicated is to establish a business as a limited liability company, or LLC.

What to consider during a merger

California companies that are looking to acquire or merge with other businesses need to take the due diligence process seriously. Ideally, they will spend a lot of time listening and learning as much as possible about an acquisition target. Taking this step makes it possible to learn more about whether a business is worth taking over or if there is too much overlap between the two entities.

Startups grow through funding rounds

Many entrepreneurs in California attempt to use investment capital in an effort to scale up their companies. Typically, a startup company will go through multiple funding rounds to meet its capital needs. In exchange for funding, investors will receive an equity stake in the business. It can take anywhere from three to nine months to complete a funding round, and later rounds generally take longer to complete because of increased due diligence.

Considerations for attracting startup investors

Which new California businesses qualify as startups is a common question in entrepreneurial circles. Typically, the term "startup company" refers to a new organization that has little or no history and little or no sales. This lack of history makes a comparison with other businesses or time periods difficult or unduly speculative. Because they lack a track record of success, startups are often seen as high-risk. Investors are often more interested in a startup's core idea or technology than they are in immediate revenues or other numbers.

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