Healthcare Services Deals: Representation & Warranty Insurance Done Right
Independent sponsor counsel for healthcare services, focused on Representation & Warranty Insurance and the deal mechanics that protect sponsor economics and LP alignment.
The economics on a healthcare services platform deal usually hinge on a handful of structural decisions. Representation & Warranty Insurance is one of them.
The typical healthcare services platform sits at $15M to $120M EV with EBITDA in the $3M to $20M range. The thesis runs on roll-up of physician practices and ancillary service lines. Most off-market healthcare deals come through advisors who have seen the structure before. Have one in your call list.
How Representation & Warranty Insurance actually gets structured.
Get to non-binding indication within two weeks of LOI sign, with carrier diligence to follow.
Negotiate retention to 0.5 percent of EV, dropping to 0.25 percent after 12 months.
Confirm policy follows form on the purchase agreement, not the other way around.
Carve out tax indemnities and known liabilities, priced separately if needed.
In healthcare services, layer in PC/MSO structuring as part of the Representation & Warranty Insurance workstream.
Treating R&W as a commodity. Carrier appetite varies sharply by industry and deal size.
"R&W is no longer optional on most independent sponsor deals over $20M. Price it into the LOI."Jason Powell · Representation & Warranty Insurance
The deal is one thing. The capital that opens up after close is another.
Refinancing, recaps, growth rounds, and the right strategic conversation eighteen months early are all downstream of relationships that take years to build and minutes to use.
Related deal pages.
Transaction Fee Structuring for Healthcare Services
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Healthcare Services
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Indemnification for Healthcare Services
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
Quality of Earnings for Healthcare Services
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
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An LOI on the desk, a healthcare services target, and a Representation & Warranty Insurance question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.