MERGERS AND ACQUISITIONS CONSULTING
Given the timeframe that mergers and acquisitions are consummated, ICA’s consultants provide Clients expedient and confidential expertise. In today’s interconnected world, mergers and acquisitions must also address the risks of cyber intrusion, information leakage and other exposures that may cause direct or indirect losses. The Client’s accountants, attorneys and management teams must therefore evaluate the acquisition from a risk management perspective.
A company’s merger and acquisition process often presents unique risk management challenges that must be addressed prior to the purchase agreement being finalized. ICA provides insight and additional firepower to the accounting and legal teams that service companies considering or undergoing mergers and acquisitions. Certain exposures to loss that are tied to the sale or purchase are not easily identifiable when examining a company’s contracts and financial statements – without untrained eyes.
Unforeseen risks and liabilities have caused mergers and acquisitions to fail, impacting the stakeholders on both sides of the transaction. Failed acquisitions have led to lawsuits against directors and officers, and in many cases, the prime cause was a failure to recognize critical liabilities and exposures attendant with the acquisition, even when the merger was intended as only a purchase of assets.
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See Below for How It Works:
Assist in developing a checklist of documents to be obtained and questions to be asked, from a risk management perspective, to properly evaluate the acquisition.
Review the target company’s assets, locations, operations and exposures and advise on how these could affect the Client’s future insurance coverage availability and premiums.
ICA reviews the Transaction Agreement to advise on matters relating to insurance and risk management, vis-a-vis the target company’s products and operations liability, employee benefits, environmental matters, workers compensation, plant closings and severance, etc. ICA analyzes the “hold harmless” and “indemnification” clauses in the Transaction Agreement specifically, as well as other critical agreements made available. ICA suggests changes for the Client to review with its counsel to meet the Client’s risk transfer objectives.
Review the target company’s claims filed (both accepted and denied) under all lines of insurance, discontinued operations and products, and advise the Client on potential hidden liabilities and costs from retrospectively rated programs, retentions, self-insured plans, “tail” and “terminal” liability obligations.
Advice on minimizing the risks of financial loss with respect to the loss exposures assumed by the Client on account of 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, such as “Discovery” period elections.