Due Diligence Experts Focused on Private Equity

HAUSER M&A Transaction Services creates value and instills confidence by providing comprehensive due diligence on the insurance and employee benefit programs of acquisitions targeted by private equity firms. Born out of an investor group, HAUSER is uniquely positioned with accountability to both the portfolio company and the financial sponsor.

INSURANCE & RISK MANAGEMENT DILIGENCE

Our Transaction Services team offers complete corporate risk insurance due diligence services related to platform, add-on and divestiture transactions.

Comprehensive Analysis, Meaningful Solutions

We deliver meaningful feedback to private equity firms by identifying potential liabilities or gaps in coverage, addressing compliance issues, and recommending results-driven solutions, inclusive of cost savings opportunities.

HAUSER’s comprehensive Insurance & Risk Management due diligence process includes:

Insurance Assessment

  • Evaluate coverage to identify program gaps and/or restrictions
  • Review insurance contract provisions and recommend changes
  • Analyze historical loss patterns, and project losses and reserve requirements
  • Develop new or revised program design for go-forward Property and Casualty and Management Liability programs to be placed concurrent with closing
  • Determine expected run-off liability costs
  • Prepare post-closing insurance budgets for pro-forma financials and the subsequent post-close insurance programs
  • Assess adequacy of loss prevention, workplace safety and business continuity programs
  • Provide peer group benchmarking for insurance limits, deductibles/retentions and premiums by line of coverage

Transactional Assessment

  • Inspect joint venture agreements to determine insurance and any transactional obligations
  • Review the insurance and indemnity provisions in company contracts to determine extent of contractual risk exposure
  • Analyze purchase and sale agreements to determine assumption of liabilities
  • Evaluate historical purchase agreements to determine assumption of liabilities from previous acquisitions/divestitures
  • Assess the impact of change of control provisions contained within current insurance contracts
  • Ensure compliance with lender insurance requirements necessary for a seamless transaction closing

Financial
Assessment

  • Evaluate pre- and post-close total cost of risk (TCOR)
  • Determine appropriateness of self-insured retentions
  • Conduct claim reserve analysis to assess collateral and balance sheet requirements
  • Identify outstanding letters of credit or escrow deposits that may be reduced or consolidated post-close and any new collateral required under revolvers
  • Recommend transactional insurance solutions including Representations and Warranties
  • Review financial ratings and the solvency of insurance carriers

HUMAN CAPITAL RISK DILIGENCE

HAUSER’s dedicated Employee Benefits due diligence team conducts a thorough review of the employee benefit and 401(k) plans.

We support transactions by evaluating all benefit programs, including medical, dental, vision, life, short and long term disability, Section 125, executive benefits, employment agreements, collective bargaining agreements, and retirement plans. We deliver meaningful feedback to private equity firms by identifying potential liabilities or gaps in coverage, addressing compliance issues, and recommending results-driven solutions, inclusive of cost savings opportunities.

Hauser’s comprehensive employee benefits due diligence process includes:

Benefit Program
Assessment
  • Review plan documents and summary plan descriptions to confirm the existece of ERISA required documents
  • Establish that programs are operated in compliance with plan provisions and compare provisions to relevant benchmarks
  • Analize carrier contracts and insurance policies to determine if change of control provisions restrict buyer’s assumption of plans, if minimum participation requirements are being met, and if plans are administered according to contract
  • Evaluate administrative practices to verify compliance with plan documents and carrier contracts and to identify any discriminatory practices
Program cost qualification and plan design assessment
  • Calculate and evaluate current costs compared with relevant benchmarks and plan provisions
  • Develop projected pro forma budget for go-foward costs using current rates, enrollment and market trend assuptions
  • Determine current funding status and calculate any potencial liabilities that influence the purchase price of targeted acquisitions
  • Identify pre- and post-close liabilities, including IBNR calculations and related accruals and compliance practices
Healthcare reform and transition services assessment
  • Identify any program changes required for compliance with healthcare reform and determine corresponding cost increases
  • Review purchase agreement and provide recommendations to shift liabilities to seller for IBNR and COBRA, as needed
  • Assist with transitional service to avoid gaps in coverage, ensure compliance and implement post-close recommendations as outlined in due diligence