By: Kenny Ogilvie
Reuters and Intralinks, as well as many other sources, are predicting continued strength in M&A transaction volume for 3Q 2015. As we prepare for increased deal volume, we are looking at ways for our clients to streamline their environmental due diligence efforts from a scheduling and cost perspective. Many acquisitions do not have significant environmental risk and thus do not warrant a Phase I assessment or in-depth environmental due diligence. It can save both time and money in these cases to conduct a desktop evaluation to document the level of environmental, health, and safety risk associated with the target portfolio or facility. Environmental desktop evaluations can also quickly identify if there may be potential environmental, health, or safety issues that may be material to the transaction and require further evaluation.
A desktop evaluation provides a high-level environmental and health and safety summary of the target’s properties and facilities based on evaluation of existing company information, publicly available information, vendor databases, and interviews with property representatives. A few examples of where an environmental desktop review can save time and money during a diligence effort are:
- Evaluating a service-based or asset-light business where properties and facilities are involved in the transaction
- Supplementing or updating information found in historical Phase I reports
- Documenting the environmental risk and exposure of a company in preparation for divestiture (ensuring any deficiencies are addressed before a buyer completes their diligence)
- Determining the probable risk across a large portfolio of sites and preparing a detailed timetable for additional due diligence across accelerated schedules.
If the environmental desktop evaluation identifies potential risks and exposures, this information can be quantified and used to make fast and accurate business decisions during acquisitions and divestitures.