Chengdu Dr. Peng Co., Ltd. "rto" Empirical Research

RTO, also known as reverse merger, is an alternative strategy of conducting IPO for a private company to go public; it is popular, fast and efficient.? China has witnessed RTO's for almost 10 years, and many of them are successful; however, in come cases, companies conducting this practice did not improve themselves significantly via this vehicle as they expected.? Only operating significantly before and after RTO, companies can benefit from it.? Through systematic research on RTO theory and detailed analysis of the case of Chengdu Dr. Peng Technology Ltd., this paper describes the importance of RTO to private companies and appropriate ways of operation on related to it.The first part of the paper is an overview.In the second part of the paper, the author introduces concepts, theories, characteristics, and goals of RTO.? She also describes the history and major benefits of Chinese private companies conducting RTO, since the base in this paper is in the private company sector.?? After summarizing related government policies and regulations on RTO, the author discusses the current procedures and models of RTO.? She explains in depth selection criteria on potential RTO targets, integration issues after the event from risk point of view, cost and benefit analysis, and common mistakes in operation.The third part of the paper analyzed the successful case of RTO done by Chengdu Dr. Peng Technology Ltd., according to the four steps of RTO -- selecting potential targets, due diligence, purchasing stocks of the target, and integrating assets.? The author illustrates the cause of success in this case from aspects of situation of the company, characteristics of environment, and details of operation around the time of this RTO. The fourth part explains the value created in the integration between previous target and host.?? Besides the initial value associated with the transaction, the companies's financials shall improve due to the take-over, which is the fundamental goal of RTO.The last part summarizes several key points for successful RTO's in this emergent, fast growing, heavily invested, severely competitive practice, including Host Company's securing control, timing the transaction, and planning strategically after the transaction.Tons of papers have been written on RTO, this one elaborates the operation details to help companies to minimize the risk, so that more companies can be more successful when entering targeted industry via this vehicle.