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The Role of an Independent Sponsor
In this episode, we’re taking a look at a unique independent sponsor’s M&A strategies. My guest Bakari Akil is the founder of Graves Hall Capital, which seeks to buy and run businesses where owners and founders are seeking an exit. Bakari will share his M&A journey and advice for enticing a seller to do business with you. He’ll also cover: Why he believes buying companies is the best wealth building strategy What types of companies he’s looking for The role of reps & warranties insurance And more Mentioned in this episode: http://graveshallcap.com https://linkedin.com/in/bakariakil Transcript Patrick Stroth: Hello there. I’m Patrick Stroth, trusted authority in executive and transactional liability and founder of Rubicon M&A Insurance Services, now a proud member of the Liberty Company Insurance Broker Network. Welcome to M&A Masters, where I speak with the leading experts in mergers and acquisitions, and we’re all about one thing here. That’s a clean exit for owners, founders and their investors. Today I’m joined by Bakari Akil, founder of Graves Hall Capital. Based in New York, Graves Hall seeks to buy and run businesses, where owners and founders are seeking an exit. And we recently had an article from Bloomberg about search funders. There’s been information about other types of buyers such as independent sponsors, so I thought it’d be great and ideal to have Bakari, who is out there in the market right now, come and join us. Bakari, great to have you. Thanks for joining us today. Bakari Akil: Thank you very much, Patrick. Patrick: Now, before we get into Graves Hall, let’s talk about you. What brought you to this point in your career? Bakari: Sure. So I am the founder of Graves Hall Capital. Graves Hall is effectively an independent sponsor. We bought companies, we’ve done a couple of
Step by Step Process for Applying, Quoting, Underwriting and Ultimate Placement of a Rep & Warranty Policy
Step 1: There’s no insurance application. If needed, Rubicon will sign any NDA required by either party. We then required the following documents:
Rep and Warranty Insurance Is a “Mature” Product
In the world of M&A, Representations and Warranty (R&W) coverage has become a go-to transaction insurance product. Many PE firms, for example, have made it an almost standard part of any deal that is able to be covered. Simply put, R&W is a mature insurance product and despite its growth in popularity, it has not fallen off in terms of quality.
The Lowdown on “Naked Tail” D&O Insurance
In insurance parlance, if you insure a particular exposure, you’re covered. If not, you’re bare. If you’re looking for a policy that covers something that’s never been covered before, you’re… naked. That’s the situation many privately held, small and middle market companies find themselves in when they seek to sell their business. The Buyer asks them to secure Directors and Officers Liability insurance (D&O), specifically a “tail” policy to make sure there’s a source of insurance coverage in case the Seller is held liable for any wrongful acts against an employee or others – things like human resources issues or
Two Ways TLPE Insurance Might Cover Your Next Deal
Two Ways TLPE Insurance Might Cover Your Next Deal When it comes to acquisitions by PE firms, having Representations and Warranty insurance to cover the deal has become almost S.O.P. – it’s that common. But not every transaction qualifies, such as those under $30M in EV, or deals where the target’s financial records weren’t complete, and the Underwriters declined to cover the deal or at least included many exclusions. There is an alternative to traditional R&W insurance. A specialized new product that can also act as a solid alternative to “tail” policies for Directors & Officers liability coverage, also known
Case Studies: TLPE and Multiple Sellers
In this series on the protection offered by Transaction Liability Private Enterprise (TLPE) insurance to small- and medium-sized business owners who are selling their companies, I’ve written about how it is especially useful in M&A transactions involving tech companies, as well as so-called “indifferent buyers.”
Case Studies: TLPE and Indifferent Buyers
You’re a small to medium-sized business about to be acquired by a much larger Strategic Buyer. You want some measure of protection during the transaction, and you’d prefer not to let a large portion of the sale proceeds sit in escrow for years in case some or all of it could potentially be clawed back if there is breach of a rep in the purchase agreement.
Case Studies: TLPE Insurance and Tech Companies
There is a new R&W product taking the lower middle market M&A world by storm: Transaction Liability Private Enterprise (TLPE). TLPE insurance is designed to fit a blind spot in deals that Buy-Side R&W policies won’t cover, specifically deals ranging from $1M to now $30M in enterprise value. Historically, these deals have been ineligible for traditional (R&W) coverage. Enter TLPE, which was innovated by London-based CFC Underwriting just one year ago, to offer protection for deals that are either too small or too expensive to justify a Buy-Side R&W policy.
Think of Insurance as a War Chest
You know about the drama with Elon Musk and Twitter. Lawsuits are flying back and forth, with both sides alleging breach of contract after Musk declined to buy the social media giant. For super-billionaires like Musk and multi-billion-dollar companies like Twitter, they have the millions needed for such drama. Money is no object. But most of us don’t have that kind of cash. That means when something goes south during a liquidity event, you need to have the proper insurance coverage in place – and proper level. But I propose that you should think about this insurance as more than