The first step towards successful investment, legal due diligence.
Article posted in 2024-12-19 13:48:13 | VEAT
Law firm Veat represented a venture capital (hereinafter referred to as "client") and successfully carried out investment advisory services of 1.5 billion won for SK Plasma, a company specializing in blood products production.
Prior to the investment stage, we thoroughly reviewed legal violations and potential risk factors related to SK Plasma’s business area of blood products production and export, and closely analyzed the status and rights of existing investors and the company's capital structure to draft a legal due diligence report.
Also, after the legal due diligence, we drafted and revised investment contracts and coordinated the rights and obligations between the investor and the target company, as well as the investment conditions and rights of the investors. In particular, we reviewed even the detailed wording of the contract to prevent conflicts with existing investors and led to a smooth negotiation.
Law firm Veat minimized legal risks by comprehensively considering the investor's characteristics, the target company's business characteristics, and the investment transaction structure, and by swiftly conducting this legal due diligence, we were able to maximize the satisfaction of both SK Plasma and the investor.
Importance of Legal Due Diligence
Legal due diligence is one of the essential stages to be performed in M&A and investment processes. Even if a company appears attractive on the surface, there may be invisible legal risks lurking within.
Identifying and responding to these risk factors through legal due diligence is like taking the first step towards a successful transaction.
The first purpose of legal due diligence is to identify legal risks inherent in the target company. If there are ongoing lawsuits or issues with a high possibility of legal violations, it will significantly impact the decision of whether or not to acquire the company. For example, if there is a high probability of losing a dispute that has reached the court stage, it can have a significant impact on the company’s business and financial status.
Legal due diligence does not merely involve discovering problems; it also allows these problems to be leveraged as a favorable lever in negotiations. For example, if legal vulnerabilities are discovered, they can be used to adjust the acquisition price (valuation) or change the contract terms to secure favorable transaction conditions.
Specialized in Corporate and M&A, Law firm Veat
Law firm Veat has experience advising startups and companies on securing investment, providing over 487 investment advisory services. We have entered the top 5 based on the number of transactions in the Bloomberg league table for the first half of 2024, demonstrating Law firm Veat's unique expertise in investment and M&A areas.
Also, Law firm Veat is centered around Seongho Choi, a lawyer with expertise in the Corporate and M&A field, and assists with essential legal reviews and contract structure settings when preparing or expanding businesses through M&A, and has successfully led several IT and startup companies’ investments and M&A, effectively resolving legal issues in complex merger and acquisition processes.
If you need legal advice related to investment, M&A, please contact Law firm Veat.
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Law firm Veat