Understanding the Singapore M&A Buy-Side Mandate Agreement

This blog post provides a comprehensive outline of a typical M&A buy-side sourcing mandate agreement in Singapore. It serves as a strong foundation for discussions with Gold House M&A, who will draft a customized agreement tailored to your needs.

Gold House M&A

M&A Buy-Side Sourcing Mandate Agreement Overview

This Agreement is made and entered into as of [Date].

BETWEEN:

[Client Company Name]

(Company Registration No. [Client Co. Reg. No.])

of [Client Address]

(hereinafter referred to as the "Client")

AND

Gold House M&A

(Business Registration No. 53486076A)

of 23 New Industrial Road, #04-08 Solstice Business Center, Singapore 536209

(hereinafter referred to as the "Advisor")

1. Engagement and Scope of Services

1.1. The Client engages the Advisor on an exclusive basis to act as its buy-side advisor for identifying, approaching, and facilitating a potential acquisition of a business or assets (the "Transaction").

1.2. The Advisor's services include, but are not limited to:

• Working with the Client to define acquisition criteria and strategy.

• Conducting market research to identify potential target companies ("Target Companies").

• Making initial, confidential contact with Target Companies.

• Assisting the Client in the preliminary evaluation and analysis of Target Companies.

• Facilitating the execution of non-disclosure agreements (NDAs) with interested Target Companies.

• Assisting in preliminary negotiations and preparing a non-binding offer or Letter of Intent.

  
  

2. Term and Termination

2.1. This Agreement commences on the date first written above and continues for an initial term of 6 months (the "Initial Term"), unless terminated earlier in accordance with this Agreement.

2.2. Either party may terminate this Agreement by giving 30 days written notice to the other party.

3. Fees and Compensation

3.1. Retainer Fee: The Client shall pay the Advisor a non-refundable retainer fee of S$[Amount] upon executing this Agreement. This fee covers services rendered during the Initial Term and is not an advance on any success fee.

3.2. Success Fee: The Client agrees to pay the Advisor a success fee (the "Success Fee") upon the successful completion of a Transaction. The Success Fee is calculated based on the "Transaction Value" as defined in Clause 3.3.

3.3. Transaction Value: The "Transaction Value" is the aggregate of:

• The total consideration paid or payable by the Client for the equity and/or assets of the Target Company.

• Any debt, liabilities, or obligations of the Target Company assumed by the Client.

• The capitalized value of any earn-out, deferred consideration, or other future payments.

  
  

3.4. Success Fee Calculation: The Success Fee is calculated as a percentage of the Transaction Value on a "Stair-Step" basis as follows:

• 5% on the first S$[Amount] of the Transaction Value.

• 4% on the next S$[Amount] of the Transaction Value.

• 3% on the remainder of the Transaction Value.

  
  

3.5. Reimbursement of Expenses: The Client shall reimburse the Advisor for reasonable, pre-approved, out-of-pocket expenses incurred in the performance of its duties under this Agreement.

4. Tail Period and Protected List

4.1. Upon termination of this Agreement, the Advisor shall provide the Client with a "Protected List" of all Target Companies introduced by the Advisor during the term of this Agreement.

4.2. For 24 months following the termination of this Agreement (the "Tail Period"), if the Client completes a Transaction with any Target Company on the Protected List, the Success Fee shall be payable to the Advisor as if the Transaction occurred during the term of this Agreement.

5. Confidentiality

5.1. Both parties agree to maintain strict confidentiality regarding all information received from the other party or a Target Company, including the existence of this Agreement and any potential Transaction.

5.2. This obligation survives the termination of this Agreement.

6. Representations and Warranties

6.1. The Advisor represents and warrants that it possesses the necessary expertise and resources to perform the services outlined in this Agreement.

6.2. The Client represents and warrants that all information provided to the Advisor is accurate and complete.

7. Indemnification

7.1. The Client agrees to indemnify and hold the Advisor harmless from any claims, damages, liabilities, and expenses arising from this engagement, except for those caused by the Advisor's gross negligence or willful misconduct.

8. Governing Law and Dispute Resolution

8.1. This Agreement is governed by and construed in accordance with the laws of Singapore.

8.2. Any dispute, controversy, or claim arising out of or relating to this Agreement shall be referred to and resolved by arbitration administered by the Singapore International Arbitration Centre (SIAC) in accordance with the Arbitration Rules of the SIAC.

9. Entire Agreement

This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

FOR THE CLIENT:

[Client Company Name]

Name: [Name of Authorized Signatory]

Title: [Title]

FOR THE ADVISOR:

Gold House M&A

Name: [Name of Authorized Signatory]

Title: Managing Partner

How Gold House M&A Can Help

Gold House M&A plays a crucial role in a buy-side mandate, acting as a strategic partner to help a company successfully acquire another business. Our expertise and structured process are invaluable, especially for companies that may not have the internal resources or experience to navigate the complexities of M&A.

1. Strategy Development and Target Identification

• Defining the Acquisition Strategy: Gold House M&A helps the client clearly define their strategic objectives. This involves working with the client to understand their growth goals, desired synergies, and the type of business that would be the best fit. We help answer key questions like: "Why are we doing this?" "What are we trying to achieve?" and "What does the ideal target look like?"

  
  

• Market Mapping and Research: Gold House M&A has access to proprietary databases, market intelligence, and professional networks that allow us to conduct thorough market research. We can identify a "long list" of potential targets that meet the client's criteria, even those not actively for sale ("off-market").

  
  

• Confidential Outreach: Approaching potential target companies can be a delicate process. Gold House M&A acts as an intermediary, making initial contact on a confidential basis to gauge interest. We can do this discreetly, protecting the client's identity and preventing unnecessary market speculation.

  
  

2. Valuation and Due Diligence

• Valuation Analysis: Gold House M&A performs a comprehensive valuation of potential targets using various methodologies (e.g., discounted cash flow, comparable company analysis, precedent transactions). This helps the client understand a fair market price and build a strong foundation for negotiations.

  
  

• Risk Assessment: Gold House M&A is skilled at identifying potential red flags and risks, whether they are financial, legal, operational, or commercial. We help the client stress-test their assumptions and make informed decisions, which is critical to avoiding costly mistakes.

  
  

• Due Diligence Coordination: The due diligence process can be extensive and complex, involving various specialists (lawyers, accountants, tax advisors, etc.). Gold House M&A acts as a project manager, coordinating these different parties to ensure a comprehensive review and that all key information is gathered and analyzed efficiently.

  
  

3. Negotiation and Deal Structuring

• Expert Negotiation: Gold House M&A brings objectivity and experience to the negotiation table. We advocate for the client's interests, manage difficult conversations, and help navigate complex deal structures (e.g., earn-outs, deferred payments, working capital adjustments).

  
  

• Structuring the Deal: Gold House M&A helps design the transaction structure, considering factors like purchase price, payment methods (cash, stock), and indemnities. Our goal is to create a structure that aligns with the client's financial and strategic objectives while being palatable to the seller.

  
  

• Letter of Intent (LOI) and Definitive Agreement: Gold House M&A assists in drafting and negotiating the key terms of the LOI and the final definitive purchase agreement, ensuring all critical aspects of the deal are accurately reflected and legally sound.

  
  

4. Execution and Closing

• Process Management: M&A transactions are fast-paced and involve many moving parts. Gold House M&A maintains momentum and keeps the process on track by setting timelines, managing communications, and ensuring all parties are aligned.

  
  

• Financing Support: Gold House M&A can assist in arranging financing for the acquisition, connecting the client with potential lenders or investors and helping to structure the capital raise.

  
  

• Closing Coordination: Gold House M&A works closely with the legal and financial teams to manage the closing process, ensuring all conditions are met and the transaction proceeds smoothly to completion.

  
  

5. Post-Acquisition Support

• Integration Planning: While not always the primary focus, Gold House M&A offers support in the post-merger integration phase. We can help with initial planning to ensure a smooth transition, the realization of identified synergies, and the successful integration of the acquired business into the client's existing operations.

  
  

In essence, Gold House M&A provides a comprehensive, end-to-end service that gives a buy-side client a competitive advantage. We bring a wealth of experience, a network of contacts, and a structured process that helps the client find the right target, mitigate risks, and successfully close a deal that creates long-term value.

Request for Proposal