Private Equity
Optimizing Risk from Letter of Intent to Exit
It’s never been more important for private equity buyers and sellers to minimize financial loss and maximize the value of each deal. Whether working with financial or strategic buyers, the professionals in our private equity industry segment can help protect company assets and make informed decisions through every phase of the deal.
At USI, we provide the convenience and security of working with one dedicated, knowledgeable insurance team throughout the entire merger or acquisition process. As part of our thorough insurance due diligence, we carefully review the offering memorandum and the purchase-and-sale agreement to identify potential red flags. Then we help define pre-closing liabilities, recommend insurance solutions to help facilitate the transaction, and offer cost-effective property & casualty and employee health & welfare insurance services after the close. Additionally, we maintain a local service team to oversee all target company insurance and benefits programs, helping to ensure that the acquiring company’s risk management principles are implemented in the portfolio company’s insurance and benefits management decisions.
USI’s Private Equity Practice offers comprehensive solutions and services, including:
- Benchmarking Services
- Risk and Insurance Due Diligence (for Private Equity and Initial Public Offerings)
- Environmental Coverage
- Loss Portfolio Transfer
- Post-Close Budgets for Property & Casualty and Employee Benefits Programs
- Post-Close Insurance and Benefits Program Servicing
- Representations and Warranties Insurance
- Solutions for Uninsured Risk
- Total Cost of Risk Analysis
- Employee Benefits Due Diligence Services and Post-Close Benefit Plan Design
To analyze our clients' business issues and challenges, our property & casualty team leverages USI ONE®, a fundamentally different approach to risk management. USI ONE integrates proprietary business analytics with a network of local and national technical experts in a team based consultative planning process to evaluate the client’s risk profile and identify targeted solutions. Clients then receive tailored recommendations for improving their total cost of risk.
Experience the USI ONE Advantage® and learn how USI’s Private Equity Practice provides thorough due diligence and solutions to help overcome M&A risk. Email pcinquiries@usi.com or contact your local USI office today.
CASE STUDY:
A manufacturing affiliate experienced significant Workers’ Compensation claims that impacted insurance costs and reduced business productivity and profits for their parent company. USI’s Private Equity Team embarked upon a detailed analysis of claim trends and conducted aggressive and targeted loss prevention studies involving ergonomics, air quality and sound level testing and general plant safety. Upon completion of the study, USI helped the organization implement a new set of operational procedures and safety guidelines within 90 days. This program resulted in an immediate impact on productivity and profitability, including a dramatic decrease in claims activity, lost time and loss of production, elimination of unnecessary third-party service providers and an increase in manufacturing efficiencies. The economic impact on EBITDA from the combined insurance cost reductions and improvements to productivity totaled $1.2 million. Assuming the company will trade at a multiple of 10-12 x EBITDA, they should expect to increase in value at time of harvest from $12M to $14M.
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