In order for companies to grow and achieve greater growth, in addition to pursuing an IPO, recently, there has been an increasing number of cases of buyouts to major companies. Synergies with major companies are expected to increase corporate value, expand business, and become a powerful choice to IPOs.
In a buyout process, it is common to conduct due diligence on the acquiring company, the buyer of the company needs to take note to experts’ opinions and respond to them accordingly. It is essential to consult with lawyers in advance, as there are many cases where deal is broken, or the amount of the transaction is reduced as a result of poor negotiation ability, contractual defects, or labor risks.
When concluding a buyout agreement, it is common for the company and management of the acquiring company to provide a representation and warranty. However, it is recommended that seller to carefully examines whether the warranty is guaranteed or not, and that seller should consult with an attorney to review of the contract in detail, such as determine whether or not the contract has an unnecessary risk even after the acquisition due to the long-term obligation not to compete.
At GVA Law Office, in addition to preparing and reviewing contracts, we also actively handle support for contract negotiations to ensure that the value does not become unreasonably low or risk-bearing after a buyout by attending negotiations with the acquiring company.