Do you have due diligence experience with Water and Sewer Construction?
May 18, 2023
by a searcher from The University of Michigan - Stephen M. Ross School of Business in Grand Rapids, MI, USA
I am submitting an LOI for a Water and Sewer Construction SMB in my area, and would be interested in crowdsourcing a list of questions. This is to make sure that I cover every base and look under every rock as I enter due diligence.
The same would apply for any company that are at the nexus of people, heavy equipment, and municipal projects (e.g. road construction, tree trimming, utilities installation and maintenance, etc.).
Thanks for the help!
from Bentley College in Miami, FL, USA
Due diligence is critical when acquiring a company, especially in sectors like Water and Sewer Construction, or other heavy equipment and municipal projects. Here's a list of questions to consider: 1. Financial Information: What were the company's revenues, expenses, net income, EBITDA, and cash flows for the last three to five years? Can we see audited financial statements for the same period? What is the breakdown of revenues by client? Is there any outstanding debt or financial liabilities? What are the current and projected capital expenditures? How does the business manage its working capital requirements?
2. Legal & Regulatory: Are there any ongoing or potential legal disputes or claims? Has the company complied with all environmental regulations, and does it have all necessary permits and licenses? What is the company's strategy for managing regulatory changes and risks?
3. Operations and Assets: What are the details of the company's current projects? What are the potential projects in the pipeline? What is the condition and value of the company's assets, including heavy equipment? How does the company handle maintenance and replacement of equipment? What are the company's safety standards and procedures? Have there been any violations or accidents?
4. Workforce & Management: What is the organizational structure of the company? What are the qualifications and experiences of the management team and key employees? What is the company's workforce size, skill levels, and unionization status? Are there any ongoing labor disputes? How does the company handle training and development?
5. Market & Competition: What is the company's market share, and who are the main competitors? What is the current and future demand for the company's services in its market area? How does the company differentiate itself from competitors?
6. Contracts & Customers: Can we review the company's contracts with its biggest customers and suppliers? What is the company's customer retention rate, and what's its strategy for acquiring new customers? Are there any dependency risks associated with key customers or suppliers?
7. Risks & Liabilities: Are there any potential environmental, health, or safety liabilities associated with the company's operations? What are the company's insurance coverage and claims history? How does the company handle potential risks such as supply chain disruption, market downturns, or regulatory changes?
8. Information Technology: What are the details of the company's IT infrastructure and data management systems? Are these systems modern and scalable? Are there any issues related to data security or cybersecurity?
Remember, it's important to ask both broad and specific questions to get a complete picture of the business. Additionally, depending on the answers you receive, you may need to ask follow-up questions to gain further insight.
from University of Missouri in St. Louis, MO, USA