LEXIT – THE MARKETPLACE FOR MERGER AND ACQUISITION

etinosirr (29)in #blockchain • 6 years ago (edited)

INTRODUCTION

A lot of companies are in existence today in our society. From multi-billion-dollar conglomerate to multi-nationals, small businesses and startups. The basic thing in common being that each company or brand have something to offer be it consumer goods we use on daily basis, to clothing’s, down to technological and scientific innovations and inventions. But amidst the desires of a company to solve a social or technological problem, the business aims to make profit. Usually this is the number one priority of any business to keep raising its profitability profile and they do have investors to make happy. Unfortunately, not all businesses get to the profitability stage. A lot of business fail along the line due to several reasons. This might be as a result of mismanagement, inadequate funding to achieve the corporate objectives or any other reason bothering on legal issues, lack of technical knowhow or incompetent members of the board of directors etc.

Now, when these companies can no longer continue being operational, they liquidate and close up making their intellectual properties, human capital, physical assets etc. to lie in waste. Over the years, Merging or outright acquisition have been used for these struggling companies to stay afloat rather than to abandon ship.
A merger is a business term that depicts a scenario whereby two or more companies come together to pull resources together to form a bigger. A company with human capital needed by another may in turn need the finance or intellectual property the other have.

Merging allows them to pull these resources together to form a bigger company. They might also merge to pull together their various market share rather than to be in competition (if that was unhealthy to any).

Acquisition on the other hand is when a much larger company buy a small venture so as to acquire its resources that they feel is beneficial to them. A bigger company might also want to acquire another small business in other to increase its portfolio or diversify its revenues sources. Most times, acquisition is done to save struggling companies which might be going out of business.
Mergers and acquisitions provide companies an opportunity to accelerate strategic growth. However, the present market for mergers and acquisition has been flawed. The two major problems mergers and acquisitions are

Difficulty for Buyers and sellers to find each other: Most sellers of intellectual properties and other assets from a failed business or one due for closure find extremely difficult to locate buyers. There is no central market open for offers of intellectual properties and assets making the process difficult, most especially if you want to sell to another firm based abroad.
Complexity of the Process: The process is really complex. To successfully initiate and eventually finalise a merger and acquisition process, you’ll need the services of industry professionals ranging corporate lawyers, investment bankers, financial advisors, appraisers and in addition, it might take an unnecessarily long time before the whole process is completed.
High Transaction Cost: it is also very expensive to engage the services of those professionals aforementioned. This could pose a problem for small enterprises.
Pricing Difficult: When eventually a firm has been able to scale through the barriers in 1 and 2, they are faced with the problem of pricing. Like I said earlier, profiting making is the top priority of any business establishment. Buyers of assets and intellectual properties will want to underprice assets to ensure they are not overpaying while sellers on the other hand wants the most out of the transaction. Without proper guidance on how to evaluate the assets, either of the M&A side could have unrealistic expectations which could sour the deal. Other times, a founders or owners of a new innovation might demand for a premium which might appear in realistic to sellers as at the time. A decision they might regret later as in the case of Yahoo and Google (Alphabet Inc.) Google have asked Yahoo for a $1 billion acquisition fee but it must have seemed rather ridiculous to them. Alphabet today is worth over $750 Billion. Also, when Facebook Inc acquired popular messaging service WHATSAPP for $19 Billion in 2014, to some it wasn’t worth the deal but today whatsapp has over 1.5 billion monthly users.

Screenshot (148).png

The Solution to these Problems. Lexit.co

Lexit is a blockchain company that seeks to remove these barriers of entry into the merger and acquisition marketplace. Now, we all know what a blockchain is. For those who don’t, the blockchain is a decentralized open ledger and database that keeps records and track of all transactions and data such as finance contracts, supply chain information and digital assets. The blockchain keeps records of all data and transactions on its network by making use of a chain of records. The blockchain is basically divided into two parts which are the block and the chain. Each block is sequence of individual transaction that are encrypted and time stamped and updated on the blockchain network upon completion. The blocks are linked together by links called chain which enable a new block to be created once the former is completed. The reason why the blockchain has seen so many application and adoptability include;
1.Secured and authenticated: The blockchain is secured and authenticated all transactions carried out on the network thus eliminating fraud and building trust. It does so by making use of a digital signature mechanism for creating and executing transactions. This helps trace and monitor the accountability of processes that took place beforehand.
2.Splintering: The blockchain allows the sharing of transaction history. Records on the blockchain once executed cannot be reversed or deleted. This makes the blockchain immutable. The blockchain is thus authentic and the more records shared on the network, the stronger the blockchain becomes.
3.Peer to Peer: The blockchain enables one to carry out transaction in a peer to peer model eliminating the influence of third parties and of middle men. This creates transparency on the network.
By deploring the blockchain technology to the process of merging and acquisition, Lexit will create a unique platform and ecosystem for the Merger and Acquisition market to replace the old method which has long proved to be inefficient. Since transactions recorded on the blockchain is immutable, the need to enable trust is eliminated during the transaction process as the use of smart contracts self-executes automatically allowing large volume of transactions to be carried out without the fear of a breach of contract.

Key offerings of the Lexit Platform.

1.Peer to Peer Deals: The blockchain peer to peer feature coupled with the LEXIT internal currency will enable deals and transactions to be carries out by linking buyers directly to sellers eliminated the need of middle men (lawyers, accountants etc.). This will reduce transactional costs and increase transaction speed.
2.Virtual Deal Rooms: This is virtual place where the terms of the transaction and non-disclosure agreements are reviewed, negotiated and signed. This will eliminate the need for representatives of the buyers and sellers to be physically present to effect a trade making it possible to buy intellectual property from any part of the world conveniently.
3.LEXIT is Free: The lexit platform is free to join you only need to need to pay a small listing fee for each auction if you are looking to sell. Afterwards, buyers can thereafter browse through listings and get involved with those of interest.

The Lexit token.

The lexit token will be the native currency to be used to interact with the lexit platform. The LXT will be the utility token of the lexit platform. More info on LXT
ICO is live and you can participate at sale