The Challenge

An established Midwest private equity and mezzanine firm engaged Equity Risk Partners to undertake a review of an acquisition candidate’s property and casualty insurance program in a timely fashion with minimal disruption to the business, and to maintain the highest level of confidentiality throughout the process. The target company was the world’s leader in swimming pool deck accessories. Due to the limited number of competitors and the unique nature of the business, the company was forced into to creating their own captive insurance program. The company also designed a complex loss mitigation program. Our client wanted to better understand the mechanics of the target company’s risk management program in order to justify its investment in what was perceived by many as a very “risky” company.

Our Solution

Equity Risk Partners was able to leverage its extensive knowledge of captives, in particular its previous experience working with a publicly-traded private equity and mezzanine firm, to execute a due diligence strategy that translated the issues for our private equity client. We conducted a thorough review of the risk management program in force. We communicated the issues in a simplistic manner, highlighting the strengths of the insurance program while simultaneously acknowledging and addressing potential buyer concerns. Using vigorous analysis, Equity Risk Partners focused on the larger claims and the company’s ability to absorb future claims and mitigate risk and compete in a global marketplace. We completed our analysis in just over two weeks.