CFC Launches Transaction Liability Product for Portfolio Acquisitions

CFC has enhanced its transaction liability suite of products with launch of a new product designed for private equity firms and businesses pursuing a portfolio of add-on acquisitions for existing or newly acquired platform companies.

According to CFC, smaller transactions, such as portfolio add-ons, were going uninsured and developed the product to expand the market of insurable risks. The product can be structured to work on the smallest of add-on acquisitions, with no minimum premium needing to be purchased and no minimum transaction size.

CFC’s product agrees to a master policy wording at the time of the primary platform acquisition and add on endorsement once each subsequent acquisition is completed. An aggregate policy limit can be agreed upfront based on the anticipated combined enterprise value of the portfolio, or individual policy limits can be agreed for each deal if add-on acquisitions have not yet been identified.

According to Grant Hollis, CFC’s transaction liability team leader who designed the product, the policy can be structured in a number of ways but offers the potential for one limit, one premium, one fee and one aggregate retention across an entire portfolio of companies.

“It negates the need for individual policy negotiations delivering a massively more efficient process for smaller deals with the added benefit for the policyholder that additional acquisitions are covered by a partner who they already have a relationship with and trust,” he said.

CFC launched its transaction liability business in 2016. CFC is a specialist insurance provider specializing in emerging risk and offering a range of commercial insurance products.

Headquartered in London, CFC serves more than 100,000 businesses in over 80 countries.

Topics Mergers & Acquisitions New Markets