M&A Advisory

Placing a Reps & Warranties Policy on a Short Time Frame

As a former Reps & Warranties underwriter and M&A lawyer, I vividly recall (and still take part in) the rush of last-minute deal flow. Early mornings, late nights, weekends, holidays – the M&A market does not stop. From a Reps and Warranties underwriting perspective, last-minute deal success is paramount. Because Reps and Warranties underwriters are usually former M&A lawyers from large law firms, they’re well practiced at last-minute deal pace and they understand the importance of getting a deal done.

I have seen R&W underwriters perform miracles for clients (and like to think that I have performed a few myself). However, keep in mind that R&W underwriters are managing complicated risks and they cannot overlook underwriting parameters with insurers and re-insurers based on deal deadlines.

Remember that your competitors are also seeking R&W capacity at last-minute – stay ahead of them in order to get the best terms from your R&W underwriters. Below is a set of simple guidelines that should help you to run a successful R&W process at last-minute.

A good R&W broker can help you work through complicated deal issues, Remember, R&W Underwriters have many deals happening at once. Help them prioritize your deal and avoid unnecessary exclusions by providing the information they need to get comfortable with the risk.

Get your deal into the R&W queue with as much time to spare as possible. Don’t wait for a final version of the Purchase Agreement – R&W Underwriters understand that the document is a work in progress. If you can avoid it, don’t wait until a week before close to reach out to your broker.

Be ready with written reports: R&W Underwriters almost always need written due diligence reports from your legal, tax, accounting, and insurance teams. Specialty areas sometimes need specialty reports (e.g., tech businesses sometimes need a tech review). Deals without written due diligence reports are very difficult (and often impossible) to place into the R&W market.

Check in with your broker when you are dealing with international operations, and don’t assume that an international operation is immaterial to your R&W Underwriter. R&W Underwriters might need to walk through the risk with local legal counsel.

Make sure the data room is well populated: R&W Underwriters will have a hard time signing off on their diligence without access to a well populated data room.

Get your corporate formations done ahead of time: Don’t lose time because you forgot to form an LLC. Remember, not all states are as simple as Delaware.

Beware of complicated pre-Closing restructurings: R&W Underwriters have not had the benefit of multiple calls with your tax advisors. They are often stepping in cold at the last-minute. If you are planning on a pre-Closing restructuring, be prepared with a written summary, if possible.

Be inclusive: Share latest drafts of the Purchase Agreement with your broker in real time. The R&W underwriter needs to review them and sign off on latest changes. Remember, they are underwriting the representations. They will pay particular attention to to reps, warranties, and indemnities.

Be polite: Simple rules we all learned as children still apply. Remember that the R&W community includes some of the most accommodating underwriters in the market. They will often bend over backwards to help you – late nights, weekends, holidays, etc. Simple manners go a long way to helping the deal cross the finish line.


Matt Somma is a Vice President in the Newfront M&A Advisory Practice. Matt focuses on Transactional Risk solutions such as Reps & Warranties, Tax Liability, and Contingent Liability. Prior to joining Newfront, Matt was a corporate attorney specializing in M&A and project finance, as well as a Transactional Risk Underwriter. As an attorney, Matt was Of Counsel at Hunton Andrews Kurth LLP, where he represented private equity sponsors and energy project developers in M&A and project finance transactions. Matt also served in an in-house capacity as M&A counsel to the Corporate Development team at Nielsen Holdings Plc (NYSE: NLSN) where his work included acquisitions, carve-outs, strategic dispositions, and minority investments. Matt began his legal career at Paul Hastings LLP and Locke Lord LLP, where he handled middle market M&A, commercial lending, and bankruptcy matters.

The Author
Matt Somma
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