How sellers qualify representations and warranties (R&W) in M&A transactions
Sellers usually make R&W in sale and purchase agreements (SPA) with respect to the target business/company being sold. The R&W serve as assurances to buyers and allocate risks between buyers and sellers. Sellers typically limit their liabilities in respect of the R&W in the following manner: 1. Use of knowledge …
My Top 10 LinkedIn Posts in 2023
In 2023, I post weekly on LinkedIn, primarily discussing the issues I have encountered in my work as a corporate lawyer in Malaysia. As a corporate lawyer with focus on M&A and equity capital markets transactions, I typically delve into topics within this sphere. I used to find conversations with …
M&A: (Almost) simultaneous execution and completion is possible
Almost all the sale and purchase agreements (SPAs) I work on in an M&A context involve the execution of the agreements and the completion/closing of the transactions taking place on different days. This is due to conditions precedent which have to be fulfilled before completion of the transactions. These conditions …
Behind the deal: Acquisition of pawnbroking companies
We advised a listed group in Singapore on its acquisition of a majority stake in pawnbroking companies in Malaysia. The following are three takeaways that I find interesting from the transaction: 1. Increased sophistication The traditional perception of pawnbroking business as small-scale operations has significantly shifted towards increased sophistication. An …
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 …