Smile Home is currently in the process of registering with the M&A support organization registration system established by the government.
When engaging in M&A support projects, we hereby declare that we will comply with the "Small and Medium Enterprise M&A Guidelines (2nd edition)" (September 2020) established by the Small and Medium Enterprise Agency and implement the following initiatives and responses. I will do it.
Record
■ Efforts to ensure and improve the quality of support
1 We will fulfill our obligations based on the contract with the client.
ž We perform brokerage and FA services with the care of a good manager (duty of care).
ž We will not seek our own or third party's interests at the expense of the client's interests.
2 Regardless of whether we have contractual obligations, as a matter of professional ethics, we will respect the wishes of our clients and act in a manner that will realize their interests.
3 The representative recognizes that in order to ensure and improve the quality of support, it is essential to (1) improve knowledge and skills and (2) carry out appropriate work, and send a message to the effect that these efforts are important. We communicate this information both inside and outside the company. We will also implement initiatives that are consistent with the messages we have sent.
4 We are implementing initiatives to improve knowledge and abilities.
5 We are implementing initiatives to ensure proper work by executives and employees who perform support work.
6 When outsourcing part of our business to a third party, we take measures to ensure that the outsourced business is carried out appropriately.
■ Specific behavioral guidelines in the M&A process
7 Based on our specialized knowledge, we provide practical proposals to our clients and support them in their M&A decision-making. In doing so, please keep the following points in mind.
ž Explicitly explain the expected important advantages and disadvantages to the consultant to the extent possible.
ž We are aware that we have the duty of care of a prudent manager (duty of care of a prudent manager) when handling the client's corporate information before concluding a brokerage contract or FA contract, and handle it appropriately.
8 Regarding the conclusion of a brokerage contract/FA contract, we will conclude a brokerage contract or FA contract that matches the actual state of our business.
9 Before concluding a contract, provide a clear explanation to the client by, for example, delivering a document containing important matters related to the brokerage contract/FA contract (see (1) to (13) below), and I am satisfied with this.
(1) Differences and characteristics between an intermediary who concludes a contract with both the transferor and transferee parties and advises both parties, and an FA who concludes a contract with only one party and advises only one party (as an intermediary, the (If a fee is received, that fact will also be included.)
(2) Scope and content of services provided (including matching, valuation, negotiation, scheme planning, etc.)
(3) Matters related to fees (calculation standards, amounts, minimum fees, deduction of fees already paid, payment timing, etc.)
(4) Expenses to be paid by the client in addition to fees (type of expenses, payment timing, etc.)
(5) Matters related to confidentiality (if the client is required to maintain confidentiality, that fact, facts that are subject to confidentiality, and confidentiality when disclosing to professionals, etc., business succession/succession support center, etc.) (Partial cancellation of obligations, etc.)
(6) Matters related to restrictions on direct negotiations (if the client is prohibited from discovering potential candidates by himself/herself and direct negotiations with the candidates discovered by the client himself/herself, a statement to that effect, the persons to whom direct negotiations are restricted, etc.) scope of purpose, etc.)
(7) Exclusive clause (possibility of second opinion, etc.)
(8) Tail provisions (tail period, target M&A, etc.)
(9) Contract period (matters regarding contract period, renewal (extension of period), etc.)
(10) If there is a clause that remains in effect even after the contract ends, the clause, its effective period, etc.
(11) Matters regarding cancellation of the contract and, if the client specifies that the brokerage contract/FA contract can be canceled mid-term, matters regarding the mid-term cancellation.
(12) Matters regarding liability (disclaimer) (requirements for liability for damages, range of compensation amount, etc.)
(13) (In the case of an intermediary) Matters that are assumed to have a risk of conflict of interest with the client
10 Explain to the person who has the authority to conclude the contract.
11 After the explanation, give the client sufficient time to consider the matter.
12 When conducting valuations (corporate value evaluations/business evaluations), we explain the valuation method and prerequisites to the client in advance, and ensure that the client is satisfied with the valuation method and price range.
13 When selecting (matching) the transferee, we will take care to ensure that detailed information about the transferor is not leaked or leaked to outside parties before a confidentiality agreement is signed.
14 During negotiations, we provide close support by explaining the overall picture and future flow of small and medium-sized M&A as clearly as possible, even to clients who are unfamiliar with the matter.
15 When conducting due diligence (DD), we encourage the transferor to prepare the materials requested by the transferee and provide support.
16 When concluding a final contract, we urge the client to reconfirm the contents of the contract to ensure that there are no omissions.
17 At the time of closing, we will prepare specific steps for the closing and confirm that the transfer consideration has been deposited by the transferee on the day of the transaction.
■ Points to note regarding the terms and conditions of brokerage contracts and FA contracts
Regarding the exclusive clause, we will act in particular by observing the following points.
18 When establishing an exclusive clause, limit its scope as much as possible. Specifically, after making it clear to the mediator/FA that the client wants to seek the opinion of other support organizations, if there is no reasonable reason to prevent this, the client should: Allows you to seek a second opinion from another support organization. However, there are restrictions on information management, such as prohibiting the disclosure of information about the other party and limiting consultation to those who have a legal or contractual obligation to maintain confidentiality or public institutions such as business succession/succession support centers. I will consider it.
19 When establishing an exclusive clause, the contract period should be set at a maximum of six months to one year.
20 We will establish a clause (including a verbal statement) that clearly states that the client can cancel the brokerage contract/FA contract at any time.
Regarding provisions regarding restrictions on direct negotiations, we will comply with the following points in particular.
21 Candidates for whom direct negotiations are restricted are limited to those that the relevant M&A specialist has been involved in, contacted, and introduced. (Except in cases where the client explicitly agrees to not negotiate directly with the client (assuming that the client requests an M&A specialist to provide support for consummating M&A with a candidate company discovered by the client).
22 Negotiations for which direct negotiation is restricted are limited to those conducted for the purpose of M&A between the client and the candidate.
23 The term of validity of the clause regarding restrictions on direct negotiations is limited to the period until the termination of the brokerage contract/FA contract.
Regarding tail clauses, we will act by observing the following points in particular:
24 The maximum tail period is 2 to 3 years.
25 The target of the tail clause is limited to the transferee that the M&A specialist has been involved in and contacted and introduced to the transferor.
■ Points to note when conducting intermediary services (*Not required if not conducting intermediary services)
When engaging in intermediary business, we will comply with the following points in particular.
26 We will fulfill our obligations based on the contract with the client. We are fair and impartial to all clients, and do not give priority to the interests of either party or act in a way that unfairly harms the interests of either party.
27 Being a mediator who concludes a mediation agreement with both parties, the transferor and the recipient, before the conclusion of the mediation agreement (especially if the mediation agreement stipulates that the agent will receive fees from both parties) , to that effect) to both parties.
28 When concluding a mediation agreement, we will clearly explain to each party in advance matters that are assumed to pose a risk of conflict of interest between the parties (*). Example: Since a contract is concluded with both the transferor and transferee, it is easier to expect communication between both parties and smooth execution of procedures, but the emphasis should not necessarily be on maximizing the transfer amount.
29 Additionally, if we become aware of matters that may cause a conflict of interest between the parties (including information that is advantageous or disadvantageous only to one party), we will provide information regarding this point to each party in a timely manner. Explicitly disclosed.
30 We will not conduct a definitive valuation and will tell the client to seek the opinion of a professional or other expert as necessary.
31 When presenting to both parties the results of a valuation as an estimated or provisional amount that has been simply calculated (simple valuation) by themselves as reference material, the following points will be clearly stated to both parties.
ž This is not a definitive valuation, but a simple calculation as reference material.
ž If the intention, opinion, etc. of one party is taken into consideration during the simple evaluation, the content of the intention, opinion, etc.
ž Be able to seek the opinions of professionals, etc. as necessary.
32 When supporting negotiations, we do not aim solely at the interests of one party, but instead strive for the interests of both parties with neutrality and fairness.
33 We will not conduct due diligence ourselves and will not make any decisions regarding the contents of the due diligence report, and will inform clients to seek the opinions of professionals, etc., as necessary.
■ Others
34 In addition to the above, we will strive to respond in accordance with the purpose of the Small and Medium-sized M&A Guidelines.
that's all