Due Diligence Management Services
EarthCon Consultants (EarthCon) provides real estate environmental due diligence services in support of property transactions across the US and Canada. With the promulgation of the EPA’s All Appropriate Inquiries (AAI) rule and resulting publication of the ASTM E1527-05 Standard for Phase I Environmental Site Assessments (ESAs), conducting proper environmental due diligence has become increasingly important. The balance is to identify business risks and meet some of the criteria required to establish Superfund (CERCLA) liability protection. And, in many cases, the proper acquisition and timely presentation of due diligence information is the key component in the completion of a transaction to the satisfaction of all parties.
EarthCon's Real Estate Due Diligence services include:
- Conducting Phase I/II/III environmental site assessments according to ASTM and lender-specific protocols at single sites and multiple locations;;
- Developing policy statements, protocols, and procedures for conducting environmental due diligence;
- Developing standardized scopes of work, approach, and reporting protocols;
- Procuring approved consultants and negotiation of master services agreements on behalf of our clients;
- Managing due diligence processes from initiation to final report completion, including administrative activities; and
- Assistance with negotiations and mitigation measures as requested by our clients.
EarthCon recognizes the critical value of due diligence to evaluate and conclude property transactions and in assessing business risk. That is why we have developed internal guidelines to provide qualified professionals who can both perform the work and manage the process to our client’s advantage.
SITUATION A global leader in the metals recycling industry was undergoing rapid growth through acquisition of operating facilities. Timing of these transactions was tight and there were numerous facilities spread across the contiguous US. Experienced due diligence teams were needed on short notice to evaluate environmental compliance and identify and assess potential environmental liabilities. Upon completion of the evaluations/assessments, the client was provided with a focused report detailing issues of non-compliance and liabilities, the likelihood that certain issues and liabilities would require remedial action, and the anticipated cost to implement remedial actions. The findings of the report were incorporated into the client’s due diligence evaluation, leading to ultimate facility acquisition decisions.
CHALLENGE Over the course of several years, potential acquisition portfolios contained anywhere from two to thirty facilities often spread out over large geographic areas. The client needed to acquire site data and complete the assessments within a short timeframe to utilize during acquisition negotiations. The data and assessment results needed to be compiled, summarized, and communicated to the client while assessment teams were still in the field.
RESULTS Based on EarthCon’s findings and evaluation, the client was able to determine that the environmental liabilities associated with approximately a half dozen facilities presented too great a business risk to fit their model and successfully steered away from them. Since 2004, EarthCon has helped the client collect and assess key data during acquisition negotiations. EarthCon’s knowledgeable senior technical professionals quickly and accurately identified significant environmental liabilities of an acquisition target and focused on the business impacts so that the client was able to integrate the data into their business acquisition model.