Banyan teams up with SPAC due diligence firm
Banyan Risk, the Bermuda-based managing general agent that specialises in writing Directors’ & Officers’ insurance, has teamed up with financial advisory firm Zukin Certification Services (ZCS), to offer a service to help companies go public.
Zukin’s service, the Reasonable Basis Review (RBR), is designed for Special Purpose Acquisition Companies (SPACs) seeking an independent review of target projections and readiness to operate as a public company. The service directly addresses the recent SEC proposed rules which state that management “must” have a reasonable basis for the assumptions underlying their prospective financial statements. Zukin makes its reasonable basis conclusions available for inclusion in public filings.
“This past year has been a difficult environment to say the least, and our aim is to assist our SPAC clients as they navigate these challenging markets,” said Tim Usher-Jones, founder and chief executive officer (CEO) of Banyan Risk.
SPACs have been a popular alternative to an initial public offering. They have two years to acquire a private company and then take them public via the acquisition.
Banyan will offer its clients a $25,000 discounted rate on the Zukin RBR service. Banyan will also discount its clients’ D&O insurance premium because the client has taken steps to mitigate its risk profile by getting a Zukin RBR. The Zukin review provides a third-party analysis of a company’s financial projections and if other public company readiness items have been adequately addressed.
“Banyan has been successfully executing a strategy to become a leader in underwriting complex risk in the global specialty markets,” said Usher-Jones. “A key focus has been supporting businesses in areas where bespoke risks shouldered by directors and officers continue to evolve, and we have quickly become a leader in providing insurance solutions to SPACs.”
“We are delighted to team up with Banyan Risk to provide this essential service for SPACs. Until today, there has been no external review of a SPAC’s readiness, and no review of the reasonable basis for projections, but we endeavor to change that,” said Jim Zukin, ZCS chairman and CEO.
“We believe our service will become a market standard, that helps transform how SPACs are viewed in the marketplace. We are excited to see Banyan offer this programme and acknowledge how the RBR can serve an as important risk mitigator for SPAC sponsors.”
Usher-Jones co-founded Banyan Risk with Peter Horrobin to create D&O insurance risk solutions. It is backed by SiriusPoint, an international specialty insurer and reinsurer.
