WMD
Press Releases
Dec 2, 2024 – Interview with Deputy CEO Kwak in Energy Economy
Joined WMD as CLO… 'Compensation only upon success' bold movement
“Zero upfront fee, complete success fee system, risk shifts 'Client→WMD’”
“Kwak Sang-bin’s legal advisory aims to provide realistic and actionable solutions to achieve the client’s goals"
These are the words of Attorney Kwak Sang-bin. On the 25th, Attorney Kwak conducted an interview with at the firm Pil’s office. Known as a ‘study genius,’ Attorney Kwak has acquired over 30 professional certifications including △CPA △Appraiser △Attorney.
He joins WMD, taking on the role of Chief Legal Officer (CLO), and challenges the M&A market.
WMD is a specialized consulting firm providing comprehensive advisory services related to M&A. Founded in the second half of this year, it supports the overall process including △strategy formulation regarding corporate mergers and acquisitions △analysis of estimated sale price △transaction structure design △due diligence support.
He said, “WMD adopts a unique operating method sharing goals with clients by pursuing a success-based performance compensation system in the M&A field," adding, “I decided to join because this operating method and client-oriented service are likely to create synergy with our existing work.”
He also clearly identified which market within the diverse M&A spectrum should be targeted. It is the SME size family succession M&A.
Family succession is a hot topic penetrating domestic politics, economics, society, and culture. Sometimes people emigrate due to the burden of inheritance tax, and it's also a popular theme frequently dealt with in cultural content referred to by the keyword 'second generation chaebol.' It is common to see political fights over the conditions of family inheritance deductions.
With various intertwined situations, clients have high standards. Especially in the case of M&A, there are many places offering services but few that realize them. Clients often end up paying an unjustified upfront fee without achieving the desired outcome.
WMD has completely transformed such a structure with the 'complete' success fee system. In this system, there is literally no upfront fee. Whereas the risk of deal success previously rested with the client, now it lies with the expert group, as there is no revenue without success. Therefore, WMD personnel cannot help but focus on transaction success.
Attorney Kwak said, “The complete success fee system is the most powerful model to bring managers considering potential sale of businesses into the M&A market," adding, “It provides significant benefits to companies with limited cash flow or operational funds as they can receive M&A advice without an initial fund burden.”
He went on to say, “Family succession is an area where if the goals of the buyer and seller align well, it can secure both growth and stability of the company," adding, “Demand for family succession M&A is steadily increasing in the domestic market, and as many instances require advice due to the complexity of inheritance issues and transfer of control, WMD targets SMEs to provide realistic strategies.”
Here is a Q&A session.
▲Please introduce WMD.
- WMD is a specialized consulting firm offering comprehensive advisory services related to M&A, supporting the entire process of strategy formulation, estimated sale price analysis, transaction structure design, and due diligence support concerning corporate mergers and acquisitions. It especially provides flexible, customized services to help clients quickly find optimal solutions.
▲When was it founded?
- WMD was established this year. Initially starting with a small number of personnel, it now provides tailored services to meet various M&A market needs, with experts from diverse fields gathered.
▲I heard you serve as the CLO at WMD. How much experience do you have in related work?
- I have performed M&A work for several years and participated in mergers and acquisitions of mid-sized and large enterprises across various industries. Based on this experience, I aim to contribute to achieving client goals at WMD.
▲If you were to summarize Kwak Sang-bin’s advisory in one sentence, what would it be?
- “Kwak Sang-bin’s advisory is about providing realistic and actionable solutions to achieve the client’s goals.” I would like to say that. We strive to give advice from not only a legal perspective but also management diagnosis, diverse value-up strategies for company success, and accounting and tax advice, enabling clients to enjoy the effect of consulting multiple experts at once.
▲What are the differentiated points compared to other advisory firms?
- WMD's differentiation lies in customized solutions for clients and the complete success fee system. We prioritize transaction success likelihood and provide practical and flexible approaches to address client issues based on expertise. Our strength lies in discovering and creating deals, offering specific proposals by exploring potential transaction opportunities for clients.
▲Considering fixed cost expenditure, the complete success fee system could be burdensome. What are your thoughts?
- Although there may be short-term fixed cost burdens, the complete success fee system is very effective in the long run. WMD forms an environment focusing on performance by minimizing such burdens through efficient cost management and a skilled expert team. This builds trust with clients and maintains a performance-based operation where compensation is received only when a transaction is successfully completed.
▲Are there any ongoing sale or acquisition cases? If you could briefly introduce them, it would be appreciated.
- Currently, we are providing M&A advisory related to the family succession of a small manufacturing company, aiming for a stable succession of its sales and production facilities. We are also engaged in the sale advisory of a mid-sized company in the distribution sector, designing a transaction structure reflecting liquidity issue resolution and the acquirer's growth strategy.
▲Are you conducting auction deals or have any plans to do so?
- Currently, we are mainly conducting private deals, but we plan to actively proceed with auction deals if suitable opportunities arise in the future. Auction deals can create high transaction value through competitive bidding, so we intend to pursue them if strategically targeted.
▲Please briefly explain the recent trends in the M&A market.
- A key trend in the recent M&A market is the decrease in large deals in favor of active acquisitions and family succession centric M&A involving startups and SMEs. Companies facing liquidity issues tend to divest assets or actively plan for family succession to secure funds. Notably, acquisitions of technology-centric SMEs related to the Fourth Industrial Revolution are increasing, contributing to the rise in small-scale deals to secure technological capabilities.
▲Please explain the difference between closing deals that occurred and sourcing deals.
- Closing deals that occurred involves executing existing listings or requests, orchestrating appropriate transaction conditions between sellers and buyers to facilitate smooth proceedings. In contrast, sourcing deals means discovering potential acquisition or sale opportunities yourself, proposing suitable transactions, and creating new deals. This process includes sharply understanding the market, uncovering hidden possibilities, and forming transactions.