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Success Stories

Strong Momentum in Reps & Warranties

Equity Risk professionals have been particularly active in the past three years and are seeing robust R&W activity across various transactions.

Strong R&W Activity

  • Equity Risk professionals have provided advisory services for numerous recent transactions.
  • Equity Risk is consistently engaged on 10+ transactions with R&W components.
  • R&W coverage is increasingly being used to replace most (and in some cases all) traditional indemnification and/or escrow to cover breaches of reps and warranties that would otherwise be provided for by Sellers’ under a private transaction agreement.
  • Median transaction sizes of $100-250M with enterprise values reaching $2B.

 

The following representative case studies illustrate recent transactions where our professionals have added value:

Target:  Privately owned software company acquired by a public technology company for $1.5 billion

Description: Seller side R&W insurance program placed to insure indemnity obligations (including IT/IP) of selling shareholders above escrow   

 

Target:  Privately owned food ingredients manufacturing operation acquired for $115 million by a foreign public company

Description: $20 million  Buyer R&W policy purchased excess of $7 million escrow to provide foreign buyer with security on indemnification on acquisition from individual shareholders

 

Target:  Private equity owned cable services business acquired by a private company for $94 million

Description: $15 million limit Seller R&W Policy purchased above the $2 million escrow   

 

Target:  Private equity owned window and door manufacturer acquired by a private company for $140 million

Description:  $25 million limit Buyer R&W Policy purchased above $7 million escrow   Foreign Strategic Public Company

 

Target:  Privately owned financial services company acquired by a foreign public company for $300 million

Description: $50 million limit Buyer R&W Policy  purchased by the Australian company in excess of $7.5 million escrow to secure indemnification   

 

Target:  Appliance manufacturing business acquired for $300 million

Description $15 million limit Buyer R&W Policy purchased with retention equal to the $3 million escrow   

 

Target:  Frozen Food Industry purchased for $130 million

Description: $20 million limit Buyer R&W Policy purchased with a retention of $2,000,000 dropping down to $750,000 after 16 months

The following blog is maintained with recent success stories of policies placed by Equity Risk Partners professionals.  You can follow this blog at http://transactionalriskcasestudies.tumblr.com: