Technical Due Diligence - bridging technical and commercial
A private equity company with very little technical capability was investigating a potential purchase of a $2bln upstream drilling company. Decision making on this acquisition was in an extremely tight timeframe.
Frame and coordinate the technical due diligence, and then feed it into the commercial analysis to ensure the key issues and risks were appropriately represented.
Designed a programme for the technical workstream based on; (1) Designing a suitable framework against which to benchmark the target’s technical capability, (2) Develop a robust technical point of view based on available documentation, engaging with the target company’s leadership and visits to assets within the target portfolio, (3) Integrate all learning in a fit for purpose report to the client
A small, focused team were mobilised at 1 week’s notice and interviewed target leadership and led site visits in 3 countries
The close out report contained clear statements on;
Red flags: Anything with potential to derail the acquisition
Technical capability: Relative to peer group
Material risks: Requiring client adjustment of their bid, or particular attention post acquisition
Capex/Opex profiles: A verification of the target company’s business plan
It is essential for technical insights to be structured and communicated effectively to financial colleagues
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