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Countless factors can impact a merger or acquisition, and experience in handling these issues can mean the difference between making and breaking a deal. Rutherfoord’s professionals have guided clients through hundreds of deals, and our services focus on assessing and handling the risks and exposures emerging from corporate or private equity transactions.
Our role in an M&A transaction involves performing due diligence and estimating future risk management costs.
Our goal is to evaluate all of the potential liabilities and risk management issues that may arise from merging with or acquiring a target company. In collaboration with our clients, we develop a comprehensive action plan of areas to be reviewed and then we execute the plan.
A major differentiator of our M&A process is our ability to integrate environmental consulting and product placement as well as employee benefits consulting within the property/casualty review. While other M&A processes may include an environmental review, our comprehensive analysis can proactively mitigate all current and potential environmental liabilities.
In addition, our consultants work closely with product specialists and underwriters to develop sound risk management strategies. The integration of specialties and resources within our firm enables our M&A team to respond with agility throughout a transaction. Although our process is customized to the unique requirements of each client, our services generally fall into three phases of the M&A process.
Phase One: Due Diligence
We conduct a risk and insurance due diligence exercise on the target company to supplement the findings of our client’s legal, financial and other advisors. While identifying potential areas of exposure, we also uncover cost-saving opportunities. Areas that may be reviewed include:
- financial impact on the cost of insurance
- identification and quantification of contingent liabilities
- accrual evaluation
- successor liability issues
- cost estimation for benefit programs
- environmental liabilities
- historical policy/coverage review
Phase Two: Transaction Solutions
In addition to traditional insurance, Rutherfoord advises on market solutions that may mitigate risk arising from corporate transactions, such as:
- tax insurance
- environmental insurance
- representations and warranties insurance
- tail and run-off insurance
Phase Three: Post Closing
Once the deal has closed, we implement insurance programs that address the integration of the acquired company or create stand-alone programs for private equity transactions. Our strategies contribute to the long-term health of the company.
Defining the Difference
Throughout every M&A process, we work in close partnership with our clients so that our process is both comprehensive and customized. Our experience proves invaluable in finding cost-effective solutions that protect our clients from potential liabilities. As a result, our clients close a deal—or, if necessary, walk away from it—with confidence.
Environmental Consulting Services
With technical expertise in pragmatic environmental management, Faulkner & Flynn, Inc. (F2) can evaluate the environmental liabilities that may impact an M&A deal. A division of Rutherfoord, F2 provides environmental risk management and consulting in collaboration with our Environmental Risk Management Practice, which brokers environmental insurance coverage.
To fully assess the extent of environmental liabilities and provide solutions, F2 can:
- evaluate regulatory compliance issues and permitting requirements, including potential costs
- review corporate environmental management structure to determine the most efficient use of resources
- manage the due diligence process, including the selection of qualified professional environmental consultants and the Quality Assurance/Quality Control of Phase I and Phase II work products
- assess the availability of state funds that may offset environmental remediation costs, including brownfields programs
- outline a process to cost-effectively manage environmental issues that may be discovered during the due diligence process
- package environmental reports to address any concerns an underwriter may have in order to negotiate the most favorable terms for insurance products
- evaluate long-lived fixed assets to determine potential FIN 47 impacts
Employee Benefits
Retaining valued employees is essential to an acquisition meeting its financial goals, and meshing employee benefits and corporate culture are critical elements of success. With an interdisciplinary staff including experienced underwriters, a PhD in health promotion/wellness and a consulting physician specializing in data mining and condition management, Rutherfoord’s benefit services team is well positioned to help clients execute a successful transaction.
Our M&A services include:
- a proactive planning process that ensures our client has a benchmarked program that serves as a platform for growth before merger discussions begin
- a comprehensive comparison of benefits of the merging companies
- identification and quantification of outstanding liabilities and risks of the target company
- development of a customized business plan and timeline for integrating the target company’s benefits into the acquiring company’s benefits while managing vendor and carrier relationships for a smooth transition
- ability to assess culture and employee behavior to develop a comprehensive solution to manage attrition and retention of employees
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