M&A Intermediation – Our Company Policy
Real Estate Strategy Institute, Inc. hereby declares that it complies with the “Small and Medium-Sized Enterprise M&A Guidelines (3rd Edition)” issued by the Small and Medium Enterprise Agency in August 2024. In accordance with these guidelines, our company implements the following initiatives and measures.
Specific Initiatives to Ensure and Improve the Quality of Support
1. Fulfilling Obligations Based on Client Contracts
•We perform intermediation and FA services with the duty of care of a prudent manager.
•We do not prioritize our own or third-party interests over those of our clients.
•As intermediaries, we remain fair and impartial to both parties, avoiding favoritism or harm.
2. Respecting Client Intentions and Acting Ethically
•Regardless of contractual obligations, we act ethically to respect client intentions and support their interests.
3. Leadership Commitment to Quality
•Our leadership recognizes the importance of knowledge and competence in ensuring quality and communicates this commitment internally and externally.
4. Effective Measures for Skill Development
•We implement practical initiatives to enhance the knowledge and skills of our staff.
5. Ensuring Proper Conduct by Officers and Employees
•We take measures to ensure that all staff involved in support services act appropriately.
6. Oversight of Outsourced Services
•When outsourcing, we ensure that third parties perform their duties appropriately.
Specific Conduct Guidelines in the M&A Process
Decision-Making
7. Providing Practical Proposals Based on Expertise
•We provide clients with practical proposals based on professional expertise to support their M&A decision-making.
•We clearly explain all significant potential advantages and disadvantages.
•We handle client information with care even before contract signing.
8. Rules for Advertising and Solicitation Prior to Contract Execution
•We comply with ethical standards and avoid excessive solicitation.
•We respect cessation requests and record them internally.
•We avoid misleading or high-pressure solicitation practices.
Execution of Intermediation / FA Agreements
9. Executing Agreements Consistent with Actual Business Operations
•We enter into agreements that reflect the actual nature of our services.
10. Providing Clear Explanations of All Important Contractual Matters
•We explain all key contract terms in writing before signing.
11. Detailed Explanation of Fees and Services
•We explain fee structures and services provided at each M&A stage.
12. Explanation Provided to Authorized Decision-Makers
•Explanations are given to individuals authorized to sign contracts.
13. Providing Sufficient Time for Client Review
•Clients are given adequate time to consider the agreement.
Valuation (Business / Company Valuation)
14. Explanation of Valuation Methods and Assumptions
•We explain valuation methods and assumptions in advance.
Selection of Potential Buyers (Matching)
15. Name Disclosure (Name Clear) Procedures
•We disclose seller information only after consent and NDA.
16. Individual Consent for Each Disclosure
•Consent is obtained individually for each buyer.
17. Protection of Confidential Information Prior to NDA
•We prevent leaks of seller information before NDA.
Negotiation
18. Supportive and Clear Guidance for Clients Unfamiliar with M&A
•We explain the process clearly and supportively.
Due Diligence (DD)
19. Support for Preparing Required Documents
•We assist sellers in preparing documents for DD.
Final Agreement Negotiation and Execution
20. Ensuring Mutual Understanding and Minimizing Post-Closing Disputes
•We support both parties to reach mutual understanding and reduce risks.
21. Explanation of Potential Post-Closing Risks
•We explain risks related to guarantees, DD, representations, and post-closing adjustments.
22. Final Confirmation Before Signing
•We prompt clients to reconfirm all terms before signing.
Closing
23. Ensuring Proper Execution on Closing Day
•We confirm that payment is received on the closing date.
Measures to Exclude Inappropriate Buyers, Exclusivity, Direct Negotiation Restrictions, Tail Clauses, and Conflict of Interest Management
Measures to Exclude Inappropriate Buyers
24. Measures to Maximize the Exclusion of Inappropriate Buyers
•We investigate buyer intent and capability.
•We explain the investigation scope to the seller.
•We verify financials, compliance, and past conduct.
•We share internal risk information and decide support through organizational processes.
Contract Clauses: Exclusivity, Direct Negotiation Restrictions, Tail Clauses
Exclusivity Clauses
25. Limiting the Scope of Exclusivity
•We allow second opinions unless there is a valid reason to prohibit them.
26. Reasonable Contract Duration
•Exclusivity is limited to 6–12 months.
27. Allowing Mid-Term Termination
•Clients may terminate the agreement at any time.
Direct Negotiation Restrictions
28. Limiting Restrictions to Introduced Candidates Only
•Restrictions apply only to candidates introduced by us.
29. Limiting Restrictions to M&A-Related Negotiations
•Restrictions apply only to M&A-related discussions.
30. Restricting Validity Period to Contract Duration
•Restrictions are valid only during the contract term.
Tail Clauses
31. Reasonable Tail Period
•Tail periods are limited to 2–3 years.
32. Limiting Tail Clause Applicability
•Applies only to buyers introduced with name disclosure.
33. No Tail Fee When Multiple Advisors Introduce the Same Buyer
•No fee is charged if we are not selected for the deal.
Conflict of Interest Risks and Practical Measures (For Intermediaries)
34. Disclosure of Dual Representation
•We disclose dual representation and fee arrangements.
35. Explanation of Potential Conflicts of Interest
•We explain and disclose any conflicts to both parties.
36. Maintaining Neutrality and Fairness
•We remain neutral and avoid unfair conduct.
37. Prohibited Conflict-of-Interest Behaviors
•We prohibit biased matching, hidden fees, false communication, and information concealment.
38. No Definitive Valuation by the Intermediary
•We do not provide definitive valuations and recommend expert advice.
39. Disclosure When Providing Simple Valuation Estimates
•We clarify that simple estimates are not definitive and may reflect party preferences.
