HAS REP & WARRANTY INSURANCE BEEN AN EFFECTIVE TOOL IN YOUR DEALS?
Private equity buyers began using R&W insurance as an ordinary course deal product several years ago as a mechanism to present a more competitive offer to Sellers. Sellers favored the use of R&W insurance because it replaced the escrow mechanism, thus releasing purchase price proceeds. Strategic acquirers are now competing with more private equity buyers than ever before and have had to adopt the R&W product in order to win deals. R&W insurance has become so common that sellers are inserting it into first drafts of term sheets.