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Preparing a Company for Sale: COVID-19 Challenges and Opportunities

Jul 07, 2020 Decorative image

Are you involved in preparing a company for sale? If yes, are you aware that there are new risks and opportunities?

Emerging from the COVID-19 pandemic, there are newly developed legal, restructuring and risk management considerations that should be in your playbook to prepare a company for sale. Transaction agreements’ unique indemnification framework and valuation enhancement from risk management structures are providing levers to pull to unlock value.

Here are five tips for your next transaction:

1. Risk management needs to be part of your strategic discussion.

2. If you are preparing for sale, be sure to do a deep dive on your risk management profile. If this is not in order, it will lower your valuation.

3. Insurance is an investment not an expense. Make sure you achieve your target rate of return.

4. Do the math. Have you calculated the total cost of risk incorporating property and casualty insurance, employee benefits, retirement packages, and executive benefits?

5. For your transaction, seek to simplify the indemnification package and liquidity event with transaction insurance.

It is important to look at a transaction with a different risk management lens, as standard frameworks are not able to make sense of the past or properly drive enterprise value. Hylant is leading the way in developing and executing enterprise wide valuation enhancement solutions and we are happy to provide you with a customized solution that fits your needs.

Visit our M&A and Transaction Solutions page to learn how we can help you reduce uncertainty, safeguard your investments and maximize financial returns during complex transactions.

The above information does not constitute advice. Always contact your insurance broker or trusted adviser for insurance-related questions.

Kip Irle, SVP, Strategic Risk Advisor, Alternative Risk, Hylant M&A Transaction Solutions