Environmental reports & manufacturing companies
January 24, 2019
by a searcher from New York University - Leonard N. Stern School of Business in New York, NY, USA
Looking at a manufacturing company that has to comply with environmental requirements. The company obtained a phase 1 environmental report from an inspector. I haven't read the report (its 400+ pages) but the owner mentioned that they received an all clear with the inspector saying there's no need for additional testing. Should I watch out for anything? I will obviously read through the report but wanted to know if anyone has any experience dealing with these types of issues in the past. Thanks
from University of Kentucky in Houston, TX, USA
(a) Towards the end of the report, there will be a recommendation section. See/understand what it says. (b) Talk to the company which did the report to see if a Phase II is required. (c) Call the State EPA agency and discuss the contents of the recommendation section with them, and also socialize the answer you get from (b) above with the agency. Get the agency's thoughts on compliance. My experience has been that the State EPA agency is usually very helpful. (d) If all works out and you are moving forward with the transaction, make sure you have a good Real Estate attorney that works with your M&A attorney. The RE attorney will be able to guide you on proper liability protection if you are leasing the land/building. (e) Make sure the Seller reps to the Phase I in your Purchase Agreement.
On a separate note, if you have not already done so, make sure you dig into OSHA compliance logs and the Plant maintenance logs to understand the state of the Plant. Also, do not underestimate the importance of raw material inventory process/systems in place at the Plant. Will help you avoid a lot of headaches down the line!
Please let me know if I can answer any other questions you might have.
All the best!
Regards,
Madan.
from Michigan State University in St. Louis, MO, USA