At Sherpa Tax Corporation, we have been certified as an M&A support institution, which allows us to apply for subsidies as part of the reward.
Mergers and acquisitions (M&A) have long been a strategic approach adopted by businesses, and in recent years, more companies have been considering it. Some common reasons for pursuing M&A include:
Wanting to expand into a new business but finding it challenging and time-consuming to start from scratch, so acquiring an existing company is preferred.
Considering retirement and wanting to explore the option of selling the company since a successor has not been identified.
Seeking further business expansion by merging with or acquiring a competitor to expand the market or enhance the workforce.
However, M&A involves finding the right partner, aligning corporate cultures, and ensuring smooth transition of operations. It also requires determining the transaction amount and careful consideration of complex organizational restructuring tax regulations. Conducting due diligence, including financial, labor, and legal assessments before the acquisition, is essential for risk mitigation after the transaction.
To maximize the benefits of M&A, it is crucial to have professional advisors. At Sherpa Tax Corporation, we have experienced certified public accountants and tax accountants specializing in the field of M&A. Just like our tax advisory services, we prioritize our clients’ interests and thoroughly understand their objectives and preferences before providing our services.
At Sherpa Tax Corporation, our experienced certified public accountants and tax professionals provide the following services in addition to assisting with the selection of target companies for acquisition or sale and participating in negotiations, We provide the following services.
In M&A negotiations, determining the purchase price is a crucial factor. It is common to use expert valuation reports as negotiation materials. Sherpa Tax Corporation, based on our track record of conducting business valuations for not only M&A but also funding arrangements and inheritance matters, can provide professional stock valuation reports.
- Examination of tax-advantageous schemes
- Utilization of loss carryforwards
By considering these while making full use of our specialized knowledge, we will be able to take future measures, including financing and taxation after M&A.
The certified public accountants and tax accountants of Sherpa Tax Corporation, who have dealt with numerous cases, will guide you to the best for each customer.
Is it okay to buy a company or business?
What risks are lurking in the company or business being acquired?
It is common to conduct a survey (due diligence) before an M&A.
Sherpa Tax Corporation reduces potential risks by conducting tax due diligence and financial due diligence on the target company or business.
At Sherpa Tax Corporation, experienced CPA and tax accountant, In addition to attending negotiations from selecting companies to acquire/sell, We provide the following services
Understanding the current situation and planning
We will carefully listen to the customer’s purpose of M&A.
Whether to aim for business expansion by merging with other companies in the same industry, or to speed up the start of a new business by acquiring an existing company or business, the selection of companies to be acquired or sold varies depending on the purpose of the M&A.
Additionally, by assessing the current situation we can maximize the effect of M&A and build a scheme that is advantageous from a tax perspective.
When considering M&A, we carefully listen to the “customer’s thoughts” and hold discussions to derive the best solution for the customer.
Target selection and negotiation
Based on the objectives expressed by our clients during the consultation, we will identify the optimal target company for sale or acquisition. Leveraging our network, we will select M&A counterparties that are desirable for our clients. After the selection process, we will respect our clients’ intentions and, as per their requests, accompany them to negotiation meetings or assist in preparing for negotiations.
Execution of Due Diligence
Even if you have successfully selected an M&A partner, it is essential to understand the risks involved in acquiring that company or business.
There may be unexpected problems lurking, and there may be situations that need to be addressed before the acquisition.
At Sherpa Tax Corporation, we conduct thorough examinations of tax and financial aspects to identify challenges and risks, and assist in making M&A transactions more successful.
Towards the final contract
Negotiations and contracts
Drawing from our experience in numerous M&A transactions, we offer assistance in the final negotiation and contract process, proposing contracts in the most desirable form for our clients and providing support in the negotiation process. Leveraging our network built over years of experience as an accounting firm, we collaborate with various professionals, including lawyers, to facilitate successful negotiations and contract finalization for our clients’ M&A endeavors.
Compliance with SME M&A Guidelines
- We conclude intermediary agreements and FA agreements that match the actual business model.
- Before concluding a contract, we will clearly explain important matters related to the intermediary contract and FA contract to the client and obtain the client’s consent. The key points to explain are:
- Differences and characteristics between an intermediary who concludes a contract with both the transferee and the transferee and advises both parties, and an FA that concludes a contract with only one party and advises only one.
- Scope and content of services provided (matching, valuation, negotiation, scheme planning, etc.)
- Matters related to fees (calculation standards, amounts, timing of payment, etc.)
- Matters related to confidentiality (facts subject to confidentiality, partial cancellation of confidentiality obligations for professionals, etc.)
- Exclusive clause (allowing or disallowing second opinions).
- Tail clause (tail period, target M&A, etc.)
- Contract period
- IIf the client wishes to include a provision explicitly stating the client’s right to terminate the intermediary agreement or FA agreement, the details regarding such termination.
- Prior to final contract signing, we will prompt the client to confirm that there are no omissions in the contract contents.
- After preparing specific arrangements for closing, we will confirm that the transfer consideration has been received from the transferee on the day.
- After clarifying to the intermediary / FA the part that the client wants to seek the opinion of the other support organization, if there is no reasonable reason to prevent it, the client will ask the other support organization we will allow you to seek a second opinion. However, we may prohibit the disclosure of information about the other party, limit consultation to persons with legal or contractual confidentiality obligations, or public institutions such as business succession/handover support centers, etc.
- When establishing an exclusive clause, set the contract period of the intermediary contract and FA contract as a maximum of 6 months to 1 year as a guideline.
- We will also establish clauses (including verbal statements) that clearly state that the client can cancel the brokerage contract / FA contract at any time.
- contract at any time. The tail period will be within 2 to 3 years at the longest.
- The target of the tail clause is limited only to the transferee who has been involved or contacted by the M&A specialist and has been introduced to the transferor.
- An intermediary that concludes an intermediary contract with both parties, the transferor and the transferee, before concluding an intermediary contract to that effect to both parties.
- Before concluding an intermediation agreement, we will clearly explain to each party in advance any matters that may cause conflicts of interest between the parties. Separately, if we become aware of matters that may cause a conflict of interest between both parties (including information that is advantageous or unfavorable only to one party), we will clearly disclose information on this point to each party in a timely manner.
- We do not carry out definitive valuations, and we tell clients to seek the opinions of experts such as professionals as necessary.
- When presenting the results of valuations as rough estimates or provisional amounts that have been simply calculated (simplified valuation) by ourselves as reference materials, the following points will be clearly indicated to both parties.
- It is not a definitive valuation, but a simple calculation as a reference.
- If the intentions, opinions, etc. of one party are taken into consideration in the said simplified evaluation, the details of said intentions, opinions, etc.
- Being able to seek the opinions of experts such as professionals as necessary.
- We will not conduct the DD ourselves and will not make any conclusions regarding the content of the DD report, and will ask the client to seek the opinions of experts such as professionals as necessary.
- In addition to the above, we will respond in accordance with the purpose (*) of the SME M&A Guidelines regarding the matters described in the SME M&A Guidelines regarding “M&A Specialists”.
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