MSG’s due diligence capabilities are rooted in our comprehensive expertise in risk assessment and our extensive deal experience. We provide support for all phases of the merger and acquisition process from private equity, corporate and strategic transactions. MSG positions its clients to minimize exposure while maximizing the value of a target merger, acquisition, divestiture, public-to private partnership, commercial loan or structured financial transaction.
MSG performs a broad function of risk management services to its private equity and corporate clients during the due diligence and post-acquisition phases. If our clients are successful in acquiring the target company, managing the day to day risk of private equity firms and their portfolio companies is critical in maintaining the integrity of the enhanced program recommendations we make during the due diligence process. Our team provides the following services and expertise focused on pre and post transaction activity:
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- An in depth review of the target company’s exposure, operations, incumbent insurance program focusing on adequacy of coverage, potential under or uninsured exposures and cost inefficiencies. We formulate a finalized budget and program on how the buyer’s future insurance program should be structured post-acquisition of the target’s assets and/or liabilities. The analysis is comprised of a detailed review of the insurance coverage, program structure, adequacy of limits, appropriate retentions, and allocated costs by each operating selling entity in private equity transactions. We identify legacy liabilities, verify claim reserve adequacy, mitigate uninsurable risks, and examine the insurance premium and service fee costs in relation to the current market.
- Post-acquisition merger integration process focused on the smooth and efficient integration of the acquired entity. The integration process focuses on improving or replacing the existing insurance and risk management program, that meets the specificity of the buyer’s business model. Often, we are able to aggregate the new businesses into the existing program of the buyer to benefit from economies of scale. In post-close scenarios where a company has a standalone insurance program, we ensure the company is adequately insured and negotiate best in class terms and conditions.
- Review collateral obligations of the target company to determine whether requirements are appropriate and conduct a comprehensive analysis using analytic modeling to help negotiate current and future collateral requirements. We also prioritize actions that protect the buyer against adverse claim development.
- Review the Purchase Agreement and advise on matters relating to insurance and risk management, vis-a-vis the target company’s product and operations liability, environmental matters, workers compensation exposure, adequacy of property insurance, etc.
- Review the target company’s currently valued claims history for all lines of insurance, discontinued operations and products, and advise the Client on potential hidden liabilities and costs from retrospectively rated programs, deductibles, self-insured plans, “tail” and “terminal” liability obligations.
- Advise on minimizing the risks of financial loss with respect to the claims exposures assumed by the Client related to taking over leases and other contracts.
- Advise the Client on compliance and notice requirements under the Client’s and the target’s insurance programs triggered by the acquisition.