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Acquisition Support

Transactional Due Diligence

Years prior, Partners provided environmental, health and safety (EHS) transactional support for a Client’s acquisition into a new market space. Recently, Partners provided environmental, health and safety transactional due diligence support associated with a Client’s bolt-on acquisition of a manufacturer of motor vehicle parts, which included an iron foundry, a wastewater treatment plant and machine shops in the eastern United States and China. The Target was also identified as a Potential Responsible Party (PRP) associated with historical waste disposal activities. Prior to the Phase I Environmental Site Assessment (ESA) site visits, Partners reviewed the Targets prior environmental permits, consent agreements, health and safety studies, and environmental assessments and investigations. Partners then used one auditor per facility to complete the Phase I ESA, material environmental compliance audit, and a material health and safety audit. Due to time constraints imposed by the Target, Partners completed over 10 facility site visits in three days.

Partners provided Phase I ESAs and EHS compliance findings. All findings were summarized in a table and included opinions of most likely cost to resolve and reasonable worst likely cases to resolve. This table was used as the starting negotiating tool at the deal table, which included Partners’ participation. Partners then provided an Environmental Indemnity Proposal to deal attorneys. With routine communication with the Client and deal attorney, Partners also reviewed, provided comments and then later provided our concurrence to the purchase agreement and disclosure schedule.

After the Client and Target agreed to terms, Partners provided an EHS matrix to assist the Client with overseeing the EHS compliance of the facilities and steps to transition permits (e.g., NPDES, air, wastewater, etc.). For the EHS issues identified by Partners and not covered in the Target’s self-disclosure schedule or covered in reps and warranties insurance, the Client has hired Partners post-transaction to assist with resolving. In addition, Partners provides oversight of the seller’s consultant’s environmental remedial work.

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