Escrow Shield Plus(SM) represents an evolution in M&A
corporate cash management
Foreseeing how new regulations will impact the deposit and money
market funds traditionally used as investment vehicles in mergers
and acquisitions (M&A) transactions, AXA Equitable, a pioneer
in financial protection, and SRS Acquiom, a leading provider of
M&A post-closing services, collaborated to launch Escrow Shield
Plus(SM), an innovative investment alternative for escrow accounts
designed exclusively for M&A.
“There has not been a lot of news around M&A escrows for
decades. That is about to change,” said Paul Koenig, Co-CEO of SRS
Acquiom, LLC.
“Under new regulatory rules, including Dodd Frank and Basel III,
M&A parties may soon find that traditional escrow options may
no longer meet their parties’ investment criteria, and may, in some
cases, become unavailable altogether,” Koenig said. “Banks are
pruning the types of deposits they take, and on what terms, due to
increased collateral requirements. Foreseeing how these
unprecedented changes would impact the cash management of merger
parties, we united AXA Equitable’s asset management expertise with
SRS Acquiom’s M&A post-closing experience to create Escrow
Shield Plus, a breakthrough investment option for corporate cash
with principal protection.”
The Escrow Shield Plus alternative investment strategy
combines:
- a collateralized guarantee of principal
from AXA Equitable,
- the opportunity for higher yields than
traditional deposit or money market-type products,
- liquidity on demand for approved claims
against the escrow, and
- premium service provided by SRS
Acquiom.
New Regulations and Increased Risk to Merger Parties
According to Thomson Reuters, more than 40,000 M&A
transactions, worth nearly $3.5 trillion, were announced worldwide
in 2014. In a typical M&A transaction, roughly 10-20 percent of
a deal's value is deposited into an escrow account upon closing,
where it is generally held for 12-24 months. The deposit serves as
a risk mitigation tool for the buyer in the event that a seller
misrepresents certain facts about its business or fails to meet
specific terms of the agreement. Funds are typically invested in
money market deposit accounts, money market funds or treasury
funds.
Following the 2008 financial crisis, regulations were put in
place to mitigate systemic risks to the financial system. The
result is a matrix of new rules governing financial institutions
and asset managers, deposits and other cash management investment
products.
"With more than 800 M&A transactions under its belt, SRS
Acquiom was early to recognize the impact that changing regulations
will have on M&A escrows and identified the need for a better
approach. AXA Equitable has a 150-plus year history of developing
solutions to meet new market needs, often teaming with leading
companies to advance our industry," said Nick Lane, senior
executive director of AXA Equitable and president and CEO of AXA
Distributors, LLC. “This is the first time a major insurance
company is entering the M&A business with an innovative
investment strategy to provide merger parties with a way to manage
escrow claims liquidity, obtain principal protection and the
opportunity for enhanced yield."
White Paper
Read more about these new regulations, the increased challenges
they pose for merger parties, and the implications for M&A
escrow funds in a white paper published by SRS Acquiom titled "New
Regulations Will Shake Up M&A Escrow Landscape." Download the
whitepaper here.
More Info
Visit the AXA US Newsroom for more information, including a
video interview with the visionaries behind Escrow Shield Plus and
an infographic on the M&A escrow process.
About AXA
“AXA” is the brand name of AXA Equitable Financial Services, LLC
and its family of companies, including AXA Equitable Life Insurance
Company (NY, NY), MONY Life Insurance Company of America (AZ stock
company, administrative office: Jersey City, NJ), AXA Advisors,
LLC, and AXA Distributors, LLC. In business since 1859, AXA
Equitable Life Insurance Company is a leading financial protection
company and one of the nation’s premier providers of life
insurance, annuity, and financial products and services distributed
to individuals and business owners through its retail distribution
channel, AXA Advisors, LLC (member FINRA, SIPC) and to the
financial services market through its wholesale distribution
channel, AXA Distributors, LLC.AXA S.A. is a Paris-headquartered
holding company for a group of international insurance and
financial services companies, including AXA Equitable Financial
Services, LLC companies. AXA S.A. is a worldwide leader in
financial protection strategies and wealth management with 103
million clients in 59 countries as of December 31, 2014. Find AXA
on Facebook, Twitter and LinkedIn. For more information, visit
www.axa.com.
About SRS Acquiom
SRS Acquiom, LLC provides innovative M&A post-closing
services that deliver better economics with unprecedented ease and
efficiency for buyers and sellers.
Services include industry-leading shareholder representation,
escrow investment and payments administration. Our innovations in
escrow solutions are utilized in a broad array of transactions,
including mergers and acquisitions and insurance. Since creating
professional shareholder representation in 2007, SRS Acquiom
continues to transform the industry, having introduced Acquiom
Clearinghouse™, the first and only online payments platform,
Acquiom® Compensation Solutions, a service for processing payments
treated as taxable compensation, and Escrow Shield Plus(sm), a
ground-breaking escrow investment option based on a unique patented
method. As the global leader, SRS Acquiom represents more than
80,000 shareholders in 95 countries and has been engaged on 800
transactions valued at $130 billion. Annual data studies and
publications are widely used to shape industry best practices.
Securities offered through Acquiom Financial LLC, member
FINRA/SIPC and an affiliate broker-dealer of SRS Acquiom LLC.
Escrow Shield Plus is not available in all states. Acquiom
Financial LLC does not make recommendations, provide investment
advice, or determine the suitability of any security for any
particular person or entity. Acquiom®, SRS®, and Acquiom
Clearinghouse™ are registered trademarks or trademarks of SRS
Acquiom LLC or its affiliates. All other logos, company names or
product names are trademarks or registered trademarks of their
respective owners. Escrow Shield Plus is issued by AXA Equitable
Life Insurance Company(NY,NY). Guarantees are based on the
claims-paying ability of AXA Equitable Life Insurance Company.
GE-104468(6/15)
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version on businesswire.com: http://www.businesswire.com/news/home/20150623005810/en/
Media:Discretion Winter, (212)
314-2968Discretion.Winter@axa.us.comorJosh Passman, (212) 279-3115
x203Jpassman@prosek.com
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