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Merger & Acquisition 2017-09-28T18:39:45+00:00

Merger & Acquisition Consultancy

ColburnColburn’s extensive participation in private equity mergers and acquisitions encompasses organizations of all sizes in a wide range of businesses. Our involvement includes over 50 different efforts by our clients from companies ranging in revenue from $1 Million to $1 Billion as well as a financial institution with assets of $500 Million. The total revenue value of these deals is in excess of $2 Billion.

By becoming part of the professional team and assisting in the due diligence on the acquisition for the prospective purchaser, we bridge the gap between accountants and attorneys. The many services we provide to facilitate the M & A process include:

  • Assist financial management team in the information-gathering phase
  • Evaluate current insurance and risk management programs
  • Evaluate historical loss experience
  • Assess risk/exposures (i.e. combined new operations/products)
  • Evaluate any self-insured, captive, large deductible, or retrospectively rated programs
  • Review of incurred claims/potential claim exposure to determine adequacy of reserves, aggregate limits and balance sheet recognition for trending and development
  • Design and implementation of an effective insurance and risk management program to respond to evolving operations
  • Placement of insurance to facilitate the transaction, including representations and warranty insurance

Merger & Acquisition Experience

Automotive Stamping & Assemblies

$270,000,000 Revenue

Broadcast Communications

$10,000,000 Revenue

Automotive Stamping & Light Assembly

$15,000,000 Revenue

Automotive Stamping

$10,000,000 Revenue

Real Estate Acquisition & REIT

$500,000,000 Replacement Cost Values

Health Maintenance Organization & Clinic Operations

$30,000,000 Revenue

Automotive Stamping, Assemblies

$30,000,000 Revenue

Wood Products Manufacturer

$15,000,000 Revenue

Manufacturer of Plastic Injection Molded Products

$15,000,000 Revenue

Printing & Graphics Firm

$15,000,000 Revenue

Automotive Stamping & Assemblies

$80,000,000 Revenue

Metal & Plastic Prototype Manufacturer

$25,000,000 Revenue

Wood Products Manufacturer

$5,000,000 Revenue

Distributor of Packaging Materials

$15,000,000 Revenue

Broadcast Communications

$6,000,000 Revenue

Real Estate Portfolio

$3,000,000,000 Replacement Cost Values

Specialty Window Manufacturer

$5,000,000 Revenue

Wood Products Manufacturer

$30,000,000 Revenue

Engineering, Design & Prototype Operation

$80,000,000 Revenue

Automotive Stamping & Assemblies

$90,000,000 Revenue

Automotive Suspension Manufacturer

$130,000,000 Revenue

Millwork Operations

$5,000,000 Revenue

Golf Facility

$5,000,000 Revenue

Foundry Operations

$30,000,000 Revenue

French Automotive Manufacturer

$195,000,000 Revenue

German Automotive Manufacturer

$57,000,000 Revenue

Italian Plastics Manufacturer

$32,000,000 Revenue

Tooling Mfr. / Engineering Firm

$30,000,000 Revenue

Worldwide Automotive Manufacturer

$130,000,000 Revenue

Financial Institution

$45,000,000 Assets

Financial Institution

$2,000,000,000 Assets

Automotive Engineering

$ 50,000,000 Revenue

Distributor of Automotive Packaging Materials

$8,000,000 Revenue

Foundry Operations

$25,000,000 Revenue

Wholesale Seafood Distributor

$6,000,000 Revenue

Worldwide Automotive Engineering & Manufacturing

$100,000,000 Revenue

Digital Video Production & Duplication

$15,000,000 Revenue

Real Estate Portfolio

$200,000,000 Replacement Cost Values

High Performance Boat Manufacturer

$80,000,000 Revenue

Chemical Manufacturer

$25,000,000 Revenue

Wood Products Manufacturer

$5,000,000 Revenue

Golf Course

$5,000,000 Revenue

Aluminum Railing Manufacturer

$12,000,000 Revenue

Valve, Precision Machine Components & Assemblies Manufacturer

$16,000,000 Revenue

Real Estate Portfolio

$205,000,000 Replacement Cost Values

Merger & Acquisition Case Study

When companies merge or acquire, they retain attorneys and accountants to conduct the appropriate due diligence of the legal and financial condition of the target company. Often overlooked are the legal and financial implications for both companies’ insurance and risk management programs.
Our client, a tier 1 international automotive supplier with operations in several states and 9 countries, proposed acquiring a competitor and directed ColburnColburn to lead the due diligence related to the insurance and risk management programs.

An initial analysis of the insurance and risk management programs revealed the existence of a self-insured workers compensation program. Self-insured programs often create significant exposures to loss and financial liability. These programs must meet regulatory requirements, obtain letters of credit and recognize both current and future claim liabilities in their financial statements.

A thorough review of the financial statements revealed several issues of concern, including:

  • The specific financial accounting recognition for workers compensations claims was set at $1,000,000 for the prior year
  • Letters of credit outstanding in the amount of $500,000

The specific reserve of $1,000,000 of open liabilities seemed inadequate in light of the historical losses. Further analysis confirmed that the target company had based their financial reserves on the currently estimated workers compensation losses alone. There was no balance sheet recognition for the appropriate growth trending and development statistics. We worked with several insurance carriers to create a ten-year loss triangle to assist in the prediction of ultimate dollars to be paid on all incurred claims. Analysis of the data indicated potential ultimate losses of $3,000,000 to $5,000,000. Presented with this analysis, the target company’s insurance carrier and accounting counsel confirmed these projections and financial exposure. A potential $2,000,000 to $4,000,000 mistake was avoided.

These higher projected losses would significantly increase requirements for letters of credit on the workers compensation program going into run-off, requiring our client to tie up additional capital resources.

Understanding the implications of these unrecognized claim values and additional LOC requirements was instrumental in positioning our client to renegotiate the terms of the deal. This resulted in a significant and commensurate reduction of the purchase price.

Merger & Acquisition Experience

Automotive Stamping & Assemblies

$270,000,000 Revenue

Broadcast Communications

$10,000,000 Revenue

Automotive Stamping & Light Assembly

$15,000,000 Revenue

Automotive Stamping

$10,000,000 Revenue

Real Estate Acquisition & REIT

$500,000,000 Replacement Cost Values

Health Maintenance Organization & Clinic Operations

$30,000,000 Revenue

Automotive Stamping, Assemblies

$30,000,000 Revenue

Wood Products Manufacturer

$15,000,000 Revenue

Manufacturer of Plastic Injection Molded Products

$15,000,000 Revenue

Printing & Graphics Firm

$15,000,000 Revenue

Automotive Stamping & Assemblies

$80,000,000 Revenue

Metal & Plastic Prototype Manufacturer

$25,000,000 Revenue

Wood Products Manufacturer

$5,000,000 Revenue

Distributor of Packaging Materials

$15,000,000 Revenue

Broadcast Communications

$6,000,000 Revenue

Real Estate Portfolio

$3,000,000,000 Replacement Cost Values

Specialty Window Manufacturer

$5,000,000 Revenue

Wood Products Manufacturer

$30,000,000 Revenue

Engineering, Design & Prototype Operation

$80,000,000 Revenue

Automotive Stamping & Assemblies

$90,000,000 Revenue

Automotive Suspension Manufacturer

$130,000,000 Revenue

Millwork Operations

$5,000,000 Revenue

Golf Facility

$5,000,000 Revenue

Foundry Operations

$30,000,000 Revenue

French Automotive Manufacturer

$195,000,000 Revenue

German Automotive Manufacturer

$57,000,000 Revenue

Italian Plastics Manufacturer

$32,000,000 Revenue

Tooling Mfr. / Engineering Firm

$30,000,000 Revenue

Worldwide Automotive Manufacturer

$130,000,000 Revenue

Financial Institution

$45,000,000 Assets

Financial Institution

$2,000,000,000 Assets

Automotive Engineering

$ 50,000,000 Revenue

Distributor of Automotive Packaging Materials

$8,000,000 Revenue

Foundry Operations

$25,000,000 Revenue

Wholesale Seafood Distributor

$6,000,000 Revenue

Worldwide Automotive Engineering & Manufacturing

$100,000,000 Revenue

Digital Video Production & Duplication

$15,000,000 Revenue

Real Estate Portfolio

$200,000,000 Replacement Cost Values

High Performance Boat Manufacturer

$80,000,000 Revenue

Chemical Manufacturer

$25,000,000 Revenue

Wood Products Manufacturer

$5,000,000 Revenue

Golf Course

$5,000,000 Revenue

Aluminum Railing Manufacturer

$12,000,000 Revenue

Valve, Precision Machine Components & Assemblies Manufacturer

$16,000,000 Revenue

Real Estate Portfolio

$205,000,000 Replacement Cost Values

Merger & Acquisition Case Study

When companies merge or acquire, they retain attorneys and accountants to conduct the appropriate due diligence of the legal and financial condition of the target company. Often overlooked are the legal and financial implications for both companies’ insurance and risk management programs.
Our client, a tier 1 international automotive supplier with operations in several states and 9 countries, proposed acquiring a competitor and directed ColburnColburn to lead the due diligence related to the insurance and risk management programs.

An initial analysis of the insurance and risk management programs revealed the existence of a self-insured workers compensation program. Self-insured programs often create significant exposures to loss and financial liability. These programs must meet regulatory requirements, obtain letters of credit and recognize both current and future claim liabilities in their financial statements.

A thorough review of the financial statements revealed several issues of concern, including:

  • The specific financial accounting recognition for workers compensations claims was set at $1,000,000 for the prior year
  • Letters of credit outstanding in the amount of $500,000

The specific reserve of $1,000,000 of open liabilities seemed inadequate in light of the historical losses. Further analysis confirmed that the target company had based their financial reserves on the currently estimated workers compensation losses alone. There was no balance sheet recognition for the appropriate growth trending and development statistics. We worked with several insurance carriers to create a ten-year loss triangle to assist in the prediction of ultimate dollars to be paid on all incurred claims. Analysis of the data indicated potential ultimate losses of $3,000,000 to $5,000,000. Presented with this analysis, the target company’s insurance carrier and accounting counsel confirmed these projections and financial exposure. A potential $2,000,000 to $4,000,000 mistake was avoided.

These higher projected losses would significantly increase requirements for letters of credit on the workers compensation program going into run-off, requiring our client to tie up additional capital resources.

Understanding the implications of these unrecognized claim values and additional LOC requirements was instrumental in positioning our client to renegotiate the terms of the deal. This resulted in a significant and commensurate reduction of the purchase price.

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