Nobody’s Dead: The Story of M&A Tombstones

Tombstones in the financial industry – one of those things that is done just because it has always been done.

Yes, you read that correctly. Tombstones.

Curious about the term? So were we.

 Before we did some research, DVS team members took a guess at the reason why the term “tombstone” is the final step in announcing a closed deal.

The Sensible One (Jenny): “To memorialize the old company…”

The Knowledge Seeker (Ben): “Actually, I don’t know… That’s kind of embarrassing.”

The Eternal Pessimist (Kevin): “Because somebody’s got to die to get a deal done.”

The Shameless Realist (Caroline): “It’s the death of one company and the beginning of another.”

Here’s the real story:

After the stock market crash in 1929 and the subsequent Great Depression, Congress enacted the Securities Act of 1933. The Securities Act of 1933 focused on disclosure- attempting to ensure that all information a shareholder would reasonably require to decide on an investment was available.  As part of that goal, the act required that a “tombstone” be published after a new securities issue had been sold. Tombstones are a type of print advertisement with a lot of blank space and simple text. Their resemblance to grave markers in cemeteries gave them their name.

This type of print advertisement was adopted by the financial industry and is currently used as a way to formally announce initial public offerings (IPOs) or a closed merger & acquisition deal. Tombstones are often posted on firm websites and sometimes in print publications as advertisements.

Certainly, not the thrilling story of intrigue we were all hoping for. Even still, tombstones are an important part of our industry. At the DVS Group, we are proud of the tombstones we have and the great stories that each tells.

Check out some of The DVS Group’s tombstones in this video: