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Analyze the advantages and disadvantages of asset sale

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Reference no: EM132904589

Question - SmallCo is a Canadian CCPC cybersecurity software company with revenues of $3M annually and $1M of profit; the company is strictly owned by its employees (around 80 employees), and the largest shareholder owns 5% of the company.

LargeCo is offering to buy the SmallCo with a guarantee that no layoffs will happen and each employee will receive a long-term contract with a 20% salary increase.

LargeCo bid is either a $12M share sale or a $16M asset sale (for all the company assets).

You are the CEO and Chairman of SmallCo (with an accounting background). Analyze the advantages and disadvantages of asset sale?

Reference no: EM132904589

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