Conversation on W&I Insurance in M&A Transactions
As an M&A lawyer with a keen interest in the nuances of the M&A field, Iโve observed that warranty and indemnity insurance (W&I) is not that common in M&A transactions in Malaysia, as far as I know. Therefore, when I saw Martijn de Lange of BMS Group commenting about W&I …
M&A: Earn-out vs. Performance Guarantee
I find that clients and other advisers sometimes confuse the concepts of an earn-out with a performance guarantee. They tell me they want a performance guarantee clause in the sale and purchase agreement, but upon further probing, it becomes clear that what they actually want is an earn-out clause. Both …
When to use (and not to use) earn-outs in M&A transactions
When I first learned about the concept of an earn-out mechanism in M&A transactions, I thought it was an absolute good idea. An earn-out bridges the gap between the sellerโs and the purchaserโs perception of the value of a target company. If the target company achieves the agreed metrics or …
M&A: What you need to consider for sale and purchase agreement
Before diving headlong into drafting the sale and purchase agreement for an M&A transaction, take some time to understand the business of the target company and the regulatory framework in which it operates. Consider the following: 1.ย ๐๐๐๐ถ๐ป๐ฒ๐๐ ๐๐ฐ๐๐ถ๐๐ถ๐๐ถ๐ฒ๐: What are the business activities of the target company? What products or …
Five key steps for legal due diligence
Most lawyers are good at identifying issues, but legal due diligence shouldnโt be limited to merely reviewing documents and identifying issues. Here are my five steps for conducting legal due diligence: 1. Identify the issues based on the scope of legal due diligence as agreed with the clients. 2.ย Provide recommendations …
Begin with the end in mind: Post-completion integration
I once worked on an M&A deal that took more than a year to complete. While the deal was not inherently complex, it dragged on due to delays in finalizing the details of the transaction agreements for reason beyond my control. As the deal involved a larger corporation acquiring a …
M&A: Considerations for Partial Stake Acquisition
Thinking about acquiring a partial equity stake in a company? Beware, it’s not as straightforward as you might think! If you are a buyer acquiring a partial equity stake in a company, beware that this gives rise to more issues than an acquisition of the entire issued shares in the …
Shares-for-shares M&A transaction: Sellers to take note
An M&A transaction in which the consideration for the shares in the target company is settled by shares in the acquiring company (purchaser) requires more planning than a cash transaction. A seller should consider the following to assess whether receiving shares in the purchaser in exchange for the sale of …
M&A Insights for Founders Who Want to Sell Their Business
Some founders embark on their entrepreneurial journey with the end goal of selling their business. The founders could smoothen the sale process by ensuring their business are managed in compliance with basic legal requirements. If you are one of those forward-looking founders, hereโs how: 1.ย ๐๐ผ๐ป๐๐ฟ๐ฎ๐ฐ๐๐ Ensure contracts which are meant …
The One Question to Ask in M&A Transactions
When discussing M&A deals with clients who are seeking to undertake acquisitions, I always ask this question: ๐๐ฉ๐บ ๐ฅ๐ฐ ๐บ๐ฐ๐ถ ๐ธ๐ข๐ฏ๐ต ๐ต๐ฐ ๐ข๐ค๐ฒ๐ถ๐ช๐ณ๐ฆ ๐ต๐ฉ๐ช๐ด ๐ค๐ฐ๐ฎ๐ฑ๐ข๐ฏ๐บ? Understanding the underlying motivation behind our clientsโ decision for their acquisitions helps us to achieve the following: – We direct our focus to what matters …