Transaction Consulting

Mergers, acquisitions and buyouts are common in the current competitive business world. Without performing the proper due diligence, investors could end up purchasing more liability than expected.

Mesirow Financial's Transaction Consulting Practice assists the following organizations in managing the impact of risk on transactions:

• Buyout firms
• Companies in active acquisition mode
• Investment banks
• Law firms
• Venture capital firms

Some of the services we perform include:

• Due diligence
• Transferring liabilities
• Reducing the fixed costs of an ongoing risk management program

Include Risk Management Experts on Your Team
Attorneys and other financial advisors typically do not have insurance training or experience and can overlook crucial risk management exposures. Mesirow Financial, however, understands how to structure insurance programs that:

• Eliminate contentious liabilities between the buyer and seller, removing an obstacle in transaction completion
• Transfer the risk of latent liabilities, enhancing the balance sheet and enabling future exit strategies
• Cap investment volatility for the buyer by insuring the cost of liabilities that exceed those in projections

Due Diligence Process
Our comprehensive approach works to prevent and protect against most risk. We present a total risk assessment that takes past issues, present factors and future estimates into account. The due diligence we perform deals with issues such as:

• Successor liability, including directors and officers
• Discontinued products liability
• Latent liability exposures
• Predecessor liability
• Representations and warranties
• Outstanding litigation
• Environmental liabilities
• Intellectual property
• Tax liability

Property and Casualty Exposures
Hidden exposures can cause unforeseen expenses for an investor. Mesirow Financial's professionals uncover the "red flags" and devise solutions that transfer the risk from the buyer. Our detailed analysis of past and present insurance programs include:

• Large deductibles and self-insured retentions for coverage such as workers' compensation, general and products liability, and automobile liability
• Standby Letters of Credit or Financial Guaranty Bonds as collateral to insurance companies
• Retrospective rating premium plans that may result in post-closing billings as a result of pre-closing loss experience
• Major outstanding additional premiums or surcharges that will become the responsibility of the buyer
• Past product recalls, OSHA violations and pending employment practices litigation that could result in future liabilities
• Third party claim administrator contracts
• Captive insurance companies
• Claims-made liability policies that may have existed
• Historical insurance carriers that have since become insolvent
• Environmental exposures

Employee Benefits Checklist
It is vital to know the details of the existing employee benefits program as they can impact the transaction. We examine this data and then benchmark it against regional, national and industry statistics to determine the performance of the plan. Then we work with you to address considerations, including:

• Plan funding options
• Contract provisions for claims coverage
• Budget projections such as estimated fixed costs, employee contributions, paid claims and liability for pending claims
• COBRA regulations for acquired and former employees

Protect Key Employees
Every organization has important individuals without whom the success and stability of the company may be in jeopardy. The unexpected exit of an owner, manager or senior sales executive can have a devastating effect on a firm. Key person insurance provides financial security should that key employee be unable to able carry out their responsibilities as a result of illness, disability or death. We help you prepare for this by:

• Evaluating the key employees and qualifying their impact on the organization
• Estimating the worth of an employee to the organization
• Determining the solution that will finance the replacement of a key employee

Professional Liability Protection
Mergers, acquisitions and divestitures usually have a great impact on directors' and officers' and partnership liability coverage. Mesirow Financial carefully identifies new exposures and offers solutions to address these risks:

• Directors and officers
• Employment practices
• Fiduciary liability
• Corporate fidelity
• Professional errors and omissions, including cyber liability
• Employed lawyers
• Kidnap and ransom
• General partnership
• Transactional liability
• Loss mitigation

Integrated Solution
Our experts are committed to implementing innovative risk management solutions that help facilitate a smooth and profitable transition for all parties involved in a merger, acquisition or divestiture.