Transaction Support for a Retail Petroleum Acquisition

Transaction Support for a Retail Petroleum Acquisition

Challenge:  

Antea Group was contracted as part of an acquisition team to provide environmental liability and compliance related due diligence services for an approximately 500 location retail fuel outlet portfolio acquisition in the southeast US. The client was a South American energy company making its first retail fuel outlet acquisition in the U.S., and the project was to be performed under an extremely tight timeline.

Solution:    

Antea Group provided its services using a phased approach to review all documents made available through a virtual data room and through public databanks. Phase I environmental site assessment reports prepared by others were reviewed to identify, summarize and assign a relative risk ranking for Recognized Environmental Conditions. An expanded evaluation was performed for known pre-existing environmental incidents to define financial implications in terms of potential gross spending and anticipated recoveries from state funds and other responsible parties. Tank system information was assembled and reviewed to determine potential capital expenditures related to system upgrades, and tank system compliance was reviewed for a cross section of sites to assess management practices and violation history. In addition, pollution liability insurance policies were reviewed to assess potential coverage and to identify gaps. Antea Group participated on acquisition team calls to educate regarding the application of U.S. environmental regulations, and to provide other advice related to the transaction and associated environmental risks. 

Result:     

The client received a quantification of environmental risk associated with the transaction that was used to negotiate the transaction financial terms and associated purchase agreement indemnifications.