Providing the Catalyst to Deal Closure

Situation
A sports equipment manufacturer was the acquisition target of a large private equity firm. It was also the target of a high volume of product liability claims. Prospective lenders needed assurance upfront that sound product liability insurance would be in place for the high risk enterprise during the term of their commitment. The lenders were concerned that the entity's claims history could ultimately make securing sufficient limits of liability difficult or prohibitively expensive.

Solution
At the request of the private equity firm, CRS worked closely with the senior management team of a leading global insurer to secure a rare multi-year product liability solution. The solution established a $25 million limit of liability over a five year term - providing the assurance lenders needed, while at the same time reducing the manufacturer's annualized premium expenses by more than 30 percent. Competing private equity firms could not find insurance that gave lenders the needed comfort level with the product liability exposure; consequently, the insurance also proved a significant competitive advantage for the acquiring firm.

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