Insuring a Dual-track M&A Process

In today's volatile market, sellers often pursue both a private M&A and an IPO exit alternative and use insurance to mitigate M&A-related risks for either route.

In the current volatile and dynamic transactional landscape for exits and carve-outs, influenced by a multitude of variables such as macroeconomic factors, geopolitical events, and market sentiment, sellers are increasingly adopting a strategic approach to maximise and optimise exit conditions in M&A transactions through a dual-track process. This approach involves sellers simultaneously or sequentially pursuing exit terms through both a private M&A exit and an initial public offering (IPO). To further enhance their risk-mitigation strategies, sellers are leveraging insurance as a valuable tool to safeguard against potential risks, inherent uncertainties, and potential exposures in these transactions, for either exit route. By incorporating insurance into their dual-track process, sellers can effectively manage and mitigate risks, ensuring a smoother and more secure transition towards their desired exit outcomes, whilst safeguarding the interests of relevant stakeholders.

Navigating the intricacies of a transaction, including its associated risks, requires the expertise of specialists who can effectively collaborate with key stakeholders such as sellers, buyers, issuers, lawyers, banks, advisors, etc. Understanding the unique constraints of each party involved and successfully steering the complex insurance market necessitates a deep understanding of the transaction, company operations, and underlying risks. At Marsh Specialty, we possess the necessary depth, experience, expertise, and agility to provide guidance on a range of relevant insurance policies, including Warranty and Indemnity (W&I)/Representations and Warranties (R&W) (for a private M&A), Public Offering of Securities Insurance (POSI) (for an IPO), Directors and Officers (D&O) (applicable in both cases), as well as contingent and tax-risk policies for known issues. Our extensive network allows us to offer our services across multiple jurisdictions, ensuring comprehensive coverage and tailored solutions for our clients – one team working simultaneously on both tracks for the benefit of the deal team.

For more information on dual-track M&A processes from an insurance and risk management perspective, please download the brochure below. It includes case studies and success stories from various industries, showcasing how organisations have effectively utilised insurance in a dual-track M&A process to achieve their strategic objectives and to mitigate risks. Alternatively, you can also contact your Marsh representative for further assistance.

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Insuring a Dual-track M&A Process

Dual-track M&A process