Industry Case: Specialty Engine Parts Manufacturer
Due Diligence & Price Adjustment, Co-Sourced EMS Planning,Financial Reviews
GaiaTech was approached by one of the world's largest suppliers of specialized engine and other components for automobile manufacturers, because they were interested in the strategic acquisition of a complementary company – a U.S.-based parts manufacturer for the automobile industry.
The target company had approximately 25 locations in the U.S., in Canada and Mexico, and in South America, the European Union, China, and India. GaiaTech's mandate was to perform a “cost-to-cure” evaluation, as a part of an environmental due diligence assessment in advance of the proposed purchase.
GaiaTech's review and report on environmental deficiencies at the target company allowed our client to realize a $35 million reduction in the purchase price on completing the deal. As a result of our work, GaiaTech was then asked by the client to conduct compliance audits at all North American facilities, including in Mexico; we then worked with the acquired company and its operating units to resolve compliance deficiencies, company-wide.
As a result of our work on the transaction, and due to a shortage of qualified environmental personnel at the acquired company, GaiaTech has assumed ongoing environmental management responsibilities. GaiaTech has helped select regional environmental coordinators; we also provide outsourced environmental compliance at one of the company's facilities in the Midwest. Other responsibilities include:
- Working semi-annually with the company's auditors to update the environmental reserves and accruals
- Overseeing environmental remediation at eight of the company's facilities in the U.S. and Mexico
- Working with the company to decontaminate and/or decommission six (6) of the company's U.S. facilities to position the properties for resale
- Initiating a company-wide environmental management system (EMS)
- Initiating an energy audit process at the company's North America manufacturing facilities
GaiaTech also participates in weekly status meetings with our client and the company's legal counsel.