The 2019 M&A Power Brokers
Inna Ashtamenko, Managing Director, Marsh
Marsh’s Inna Ashtamenko is lauded for being a very nuanced communicator. Whether it’s in a presentation to a board or to a panel of underwriters, she is super sensitive to her audience and the need to help the risk manager put their best foot forward.
“What sets her apart is that she understands what a risk manager needs to be successful and what the broker needs to be for that risk manager to be successful in the eyes of the executives at their company,” said a veteran risk manager with experience in the energy and transportation sectors.
“She is just very good at understanding the right fit for our team and getting people on the account to just hustle,” he added. “She is on top of it and makes all deadlines.”
In the case of an acquisition, Ashtamenko’s client was the target company, and the acquirer used a different broker. Given the opportunity to compete for the business, Ashtamenko prevailed. The benefits to the combined companies were substantial: A premium savings of more than $3.8 million and a savings of an additional $23 million in collateral requirements to the insurer. Ashtamenko’s team effectively combined the programs while eliminating gaps in coverage and improving coverage in key areas.
A client also said Ashtamenko is very good at seeing past the glittering reputations of some brokers and instead finding the broker, even if they are more junior, who is a much better fit for the deal or the program.
“She is hands-down the best,” the risk manager said.
Jessica Harger, Vice President, Aon
Clients give Aon’s Jessica Harger credit for being technically adept but clear enough in her communications that she doesn’t confuse things.
“A lot of brokers are guilty of using too much jargon, which often confuses the client, but Jessica cuts through all that and gets to the heart of the matter,” said Thomas Kim, director and global risk manager, KKR Capstone.
One of Harger’s clients was in a real pinch. They were trying to negotiate a purchase agreement, and the seller was unwilling to provide indemnity for two outstanding tax issues spotted by the buyer.
Harger was able to work with the legal and accounting advisors for both the buyer and the seller to craft a tax insurance solution that shielded the buyer from exposure on both tax issues. Harger feels the $600 million in coverage cobbled together with the backing of 13 carriers is one of the largest tax insurance programs ever placed.
Another client, a publicly traded company in the Fortune 500, was pursuing a merger with a unit of a UK-based public company. The newly combined company would be based in the UK, which might raise flags from the IRS on the grounds that it was an abusive inversion transaction.
In just over two weeks, Harger built an insurance program offering protection against any challenge by the IRS on anti-inversion basis.
Rohan Verna, Vice President, Marsh
When two energy companies merged, Marsh’s Rohan Verma was brought in at the very last minute to consolidate their workers’ compensation and auto liability programs. The companies made it very clear they expected to achieve significant synergies.
Making matters complicated, the companies had divergent approaches to risk transfer products. Verma’s team provided a total cost of risk analysis to get at the best structure for the combined company.
The team hit a home run, achieving a 60 percent rate reduction in the workers’ comp program and a 35 percent reduction on the auto liability program — yes, that’s right, the auto liability program. The team was also able to reduce the total outstanding collateral by 14 percent by selling underwriters on the combined company’s excellent financials and backing it up with analytics.
In the case of yet another large international acquisition, Verma was able to quell the fears of a risk manager who was concerned the excess liability limits for the new company might be inadequate. Verma delivered very competitive pricing in a situation where the program increased its limits by 50 percent.
“Rohan assisted with our complex integration of a company that we acquired,” said one risk manager. “In doing so he capably handled the combination of the policies and analysis of alternative structures, helping us find the most efficient way forward and reducing costs in the process,” the risk manager said.
Jonathan Gilbert, Managing Director, Alliant
As the long-time M&A practice leader at Crystal & Co., Jonathan Gilbert provided risk management advice for more than 2,000 transactions. In April, privately held Crystal announced it was being acquired by Alliant, but Gilbert will remain at Old Slip in Lower Manhattan.
Recently, Gilbert went to bat for an events management company that suffered a series of financial setbacks.
The company was attempting to sell its portfolio company. But there was a concern that related-party debt would be considered equity by the IRS, and therefore, interest, which was deducted from taxable income over an 11-year period, would be reversed for tax purposes. The exposure amounted to $40 million.
The buyer, of course, had no appetite for taking on an enormous tax bill. Numerous insurance brokers told them risk transfer in this case was an impossibility. The buyers then reached out to Gilbert.
After five months of negotiations, he got it done, delivering a risk solution that allowed the seller to get realization on a 10-plus year investment. This turned the deal into a sweet one for the acquirer.
“I think he very clearly understands the philosophical requirements we have from an insurance perspective, and then he is able to approach it pragmatically from a product perspective in the marketplace,” said one CFO.
“He’s got an extensive, wide knowledge, and on the very rare occasion he needs to research, he always does it quickly,” he said.
Lydia Ramcharitar, First Vice President, Alliant
In the area of mergers and acquisitions, Alliant’s Lydia Ramcharitar makes her mark as a specialist in employee benefits consulting.
For a client with a poorly constructed benefit plan, she was brought in to complete due diligence on the plan just two weeks before renewal. What she saw was not pretty.
There was a lack of health care coverage for out-of-state employees; the loss ratio was at 125 percent; and there was a pending 20 percent renewal increase. In just two weeks, Ramcharitar was able to revamp the program. She eliminated all exposure, enhanced employee relations and saved the client $150,000 on their health care spend.
In another instance, Ramcharitar helped a client overcome reps and warranties exclusions in its due diligence process. The seller in the deal got an ACA non-compliance letter with an attached penalty of $630,000. Ramcharitar suggested the seller self-report the error, securing removal of the penalty fee prior to the deal closing.
“I could go on and on, I adore her,” said Elizabeth Woodhouse, AVP of human resources and talent, Walden Behavioral Care.
Woodhouse worked with Ramcharitar while at another company and brought the broker with her when she went to Walden. Ramcharitar was able to take a benefits program that was facing double-digit increases and reduce it to single-digit increases.
“She blew it out of the park in terms of knowledge and resourcefulness,” Woodhouse said.
Harry Wallace, Vice President, Marsh
Among his clients, Marsh’s Harry Wallace is known as an innovator in the art of placing insurance to cover tax liabilities and other obstacles that could scotch a deal if left unaddressed.
“Reps and warranty insurance is still a relatively new product, and lawyers and clients are still getting their arms around how it works,” one client said. “
Harry really adds value by rolling up his sleeves and taking the time to walk through hypotheticals and make suggestions. He does a good job of educating his clients on how to get the most value out of the policy.”
Wallace is viewed as an innovator in creating dedicated tax insurance policies that cover an acquirer if the tax liabilities in a merger or acquisition prove to be greater than anticipated.
He is also credited with creating antitrust policies [along with AIG] that cover the dealmakers for their expenses should regulators decide the deal violates federal antitrust laws and force it to be unwound.
Brought in to assist on a large and fast-moving transaction, Wallace and his team were able to craft a multi-policy solution that insured post-transaction liabilities, enabling the deal to close successfully.
In another case, Wallace heard through the grapevine an acquisition in a foreign country was being frustrated over a perceived inability to purchase R&W insurance in that country. Wallace led a conference call with the deal team and transactional liability experts in the target country, which diffused the objections one by one and enabled the deal to proceed.