Banyan Risk looks to ‘transform’ SPAC market amid ‘challenging environment’

Banyan Risk, the Bermuda-based managing general agent that specialises in writing directors’ & officers’ insurance, has teamed up with a SPAC-focused financial advisory firm to offer a unique service to help companies go public.

Zukin Certification Services’ 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, providing a third-party analysis of a company’s financial projections and if other public company readiness items have been adequately addressed.

SPACs have been a popular alternative to an initial public offering (IPO). They have two years to acquire a private company and then take them public via the acquisition.

“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 (Pictured), founder and chief executive officer of Banyan Risk.

“Banyan has been successfully executing a strategy to become a leader in underwriting complex risk in the global specialty markets,” he added. “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.”

After many years of buoyant activity, SPAC clients are currently facing challenging conditions and high costs for their D&O insurance programmes. The Banyan Zukin partnership aims to alleviate these costs for sponsors who receive an RBR.

Usher-Jones  said: “Our clients are calling for a service like the Zukin RBR. It allows its users to better prepare for issues raised about target-company readiness and to assume the burdens and duties of entering the public market.”

Jim Zukin, Zukin’s chairman and chief executive officer, said: “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.

“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

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