Today’s volatile business environment can cause contract breaches during an acquisition, whether intentional or unintentional/unforeseen, resulting in exposures for both buyer and seller. Woodruff Sawyer can secure representations and warranties insurance (RWI) that provides coverage to all parties in the fast-paced mergers & acquisitions (M&A) arena. RWI is M&A transaction insurance that gets triggered in the event that any representations or warranties given in a standard purchasing agreement (SPA) prove to be incorrect, resulting in a breach of the sale contract.
Reps and Warranties Insurance Can Facilitate Successful M&As
M&A participants are purchasing RWI policies more frequently in recent years, but many dealmakers turn to such insurance only after negotiations appear to result in suboptimal exposure to business risks. When employed early, however, RWI may actually increase the deal value and make the difference in whether or not a deal gets done.
Shielding Both Buyers and Sellers
Representations and warranties insurance protects you by helping you:
- Overcome obstacles in transaction negotiations
- Extend the life of a warranty
- Bridge the gap between desires of seller and buyer
- Partially fund shortfalls in the escrow, helping to obtain better investment returns and/or hasten access to funds
To learn more, about our M&A Transaction Insurance services, contact our Group Leader, Emily Maier.
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Leading Woodruff Sawyers M&A practice, Emily provides consultation to clients seeking to minimize their risks associated with merger and acquisition activity. This includes representations and warranties, tax opinion liability, and litigation buy-out coverages. She has worked with both strategic and private equity buyers and sellers over a wide range of transaction sizes and industries, and is a frequent speaker and author on M&A transaction solutions.