M&A: Term sheet in M&A transaction
๐๐ด๐ฆ ๐ข ๐ต๐ฆ๐ณ๐ฎ ๐ด๐ฉ๐ฆ๐ฆ๐ต ๐ง๐ฐ๐ณ ๐ต๐ฉ๐ช๐ด A term sheet is used in M&A transaction to set out the key commercial terms such as price, basis for price adjustment, earn out, profit guarantee and execution of new employment agreements with key employees of the target entity. The term sheet may be …
M&A: Certainty of terms
It drives me a bit crazy sometimes when parties to transaction agreements request for ambiguous provisions to be included into agreements. By that I mean provisions which beg one or a combination of the following questions: -What needs to be done to achieve the desired result? -Who is responsible? -How …
M&A transactions and practical empathy
I was reminded of what Seth Godin said about practical empathy in a podcast while I was in a meeting that went on for hours to discuss an M&A transaction. It may not be verbatim. It went along the lines of โ๐ฑ๐ฆ๐ฐ๐ฑ๐ญ๐ฆ ๐ฅ๐ฐ๐ฏโ๐ต ๐ฌ๐ฏ๐ฐ๐ธ ๐ธ๐ฉ๐ข๐ต ๐บ๐ฐ๐ถ ๐ฌ๐ฏ๐ฐ๐ธ, ๐ฅ๐ฐ๐ฏโ๐ต ๐ธ๐ข๐ฏ๐ต ๐ธ๐ฉ๐ข๐ต …
How long does it take to complete M&A transactions?
Clients always ask how long it would take to conduct legal due diligence, draft transaction agreements and complete the proposed acquisitions. The answer is โit dependsโ. The timeline depends on: – clients to provide the commercial terms they want and their comments to draft agreements; – target companies to provide …
What agreements are required for investment into a company?
When determining what agreements are required for investment into a company, consider the following: 1. What is the mode of investment? For example, is the investment by way of acquisition or subscription of shares of the company? 2. What is the subject matter and purpose of the agreement? 3. Who …
Subscribing or acquiring shares: check the pre-emptive rights first
An investor who wants to subscribe to shares or acquire shares in a private company should first consider whether there are any restrictions to do so in the following documents: 1. Constitution of the company (if the company has adopted a constitution); and 2. Shareholders agreement (if the current shareholders …
Sale and purchase of assets versus shares
The following are some points to consider when deciding whether to structure a deal as a sale and purchase of assets or shares. 1. Stamp duty Sale of assets in Malaysia attracts stamp duty at 1% to 4% of the sale consideration or market value of the assets, whichever is …
Change of name for M&A and IPO exercise
Todayโs post is on change of name of a company in M&A and IPO context. Consider the following scenario. A shareholder incorporated a few companies with similar names. Now, the shareholder wants to dispose all shares held in one of the companies (target company) and undertake IPO for the remaining …
M&A: Basis for purchase price
A buyer and a seller in an M&A transaction may value the business or target company based on an agreed basis such as by reference to a multiple of profits for an agreed period of time. The buyer may want to consider including a clause in the sale and purchase …
M&A: What should and shouldn’t survive termination?
Sale and purchase agreements for M&A transactions usually provide for certain clauses of the agreements to survive termination. In other words, if the agreements are terminated. some clauses continue to be effective. Termination of agreements only terminates the partiesโ duties to carry out contractual obligations which have not been performed …