What We Do

The risky business of mergers and acquistions; know when to hold 'em and when to fold 'em.

Many factors influence the success of a merger or acquisition, environmental liabilities being one. Companies that do not perform their homework during mergers and acquisitions can end up having to pay for the unexpected costs of cleaning up past sins and bringing future operations into compliance, on top of paying for the acquisition. They can also miss out on opportunities to mitigate or distribute liabilities for past environmental sins and acquire redevelopment incentives for plant expansions.

Mergers and acquisitions (M&A) can be quite complex, and to ensure the desired return on investment, it is important to understand the scope, magnitude and potential financial exposure associated with environmental liabilities:

Site contamination from past operations
Off-site liabilities from past disposal practices
Ongoing non-compliance with applicable environmental, health and safety laws and regulations

SME’s Environmental Team can help identify and quantify these environmental risks and financial exposures before the deal is done, whether for just one site or several, or for buyer or sellers.

Site Contamination

Site environmental due diligence can be as simple as reviewing historical information or as complex as conducting a site contamination investigation. But it all starts with determining our client’s risk tolerance, considering the type of acquisition – asset or stock – and applicable state and federal laws governing liability for existing contamination. We then review available operations information and environmental assessment data to identify data gaps and conduct additional assessments, if necessary. The cumulative data is evaluated to identify and financially quantify short-term (e.g., human exposure, off-site migration) and long-term (e.g., site cleanup) environmental obligations, risks and potential investments associated with on-site issues.

Off-Site Liabilities

Off-site liabilities can be larger than on-site issues if the acquired party is or may be a potentially liable party for cleanup of another site, such as a waste management facility. The SME M&A Team carefully reviews historical waste and effluent management practices and regulatory agency files to identify and quantify potential liabilities

Regulatory Compliance

Also important for M&A due diligence is a Regulatory Compliance assessment. The SME Environmental Compliance Team will review facility operations and records to determine applicable environmental, health and safety regulations and the current levels of compliance. Our team evaluates effluents, waste streams, permits, plans and management practices to determine areas of non-compliance, identifies resulting residual liabilities and financial impacts, and develops post-acquisition plans and cost estimates for attaining and maintaining compliance.

The presence of hazardous materials, such as asbestos-containing materials, lead-containing paints and PCBs, can pose a regulatory compliance risk and an exposure risk for building occupants if not properly managed, and future abatement costs can create a long-term liability. We will assess the presence and condition of hazardous materials in the facility and develop plans and cost analyses for management approaches from containment in-place to complete abatement.

Are you also concerned about the conditions of the facilities you are acquiring? Our Building Materials Teams will assess current conditions and identify short-term and long-term maintenance and replacement needs for foundations, facades, roofs, coatings, equipment systems and energy systems.