Due diligence investigations
Manage your mergers, takeovers and valuations with strategic vision. KEMA provides due diligence consultancy services to investors, bankers and legal companies involved mergers and takeover transactions.
KEMA acts as Technical and Regulatory / Market Advisor for both potential Buyers and Vendors in the due diligence process related to electrical infrastructures, power plants, waste to energy plants, wind farms and other generation facilities in due diligence investigations.
Our technical advisory activities include:
- assessment of the asset condition – site visits
- investigation of technical operating data, operating regimes and flexibility of the assets
- application of quantitative, methods and techniques for network analysis
- assessment of efficiency and availability of the assets
- assessment of policies regarding design and planning of maintenance, extension, re-rating and upgrades
- assessment of technical and regulatory aspects
- environmental assessments (e.g. permitting, licenses)
- forecasting of capital and operational expenditures
- evaluation of assets under consideration.
Our regulatory / market advisory activities include:
- analysis of the market design and market rules
- analysis of the price control framework
- energy market modeling and price forecasting
- establishment of regulatory asset base
- quantitative modeling and revenue projections
- fully-fledged financial modeling
- assessment of regulatory and political risks
- economic benchmarking and efficiency analysis
- financial performance analysis.
In order to complete a thorough Due Diligence investigation for potential buyers, KEMA usually undertakes a two-phase approach, which is related to the transaction stages. Phase 1 focuses on reviewing existing due diligence reports, information memorandums, annual reports, regulatory publications, et cetera. We document the findings in a comprehensive report including risk matrix, highlighting the key findings and potential issues arising from the information reviewed. The Technical due diligence report also discloses the areas of non-compliance and technical / environmental liabilities are also included in the report together with preliminary cost-estimates for achieving compliance and covering liabilities wherever possible.
In phase 2 we assess, validate, quantify and verify the associated risks and liabilities. The results are documented is a report (executive summary) addressing factual information and the key findings from the Due Diligence (TDD) investigation. The report highlights the risks that the company/asset owner is currently exposed to given its business and regulatory requirements/commitments and an assessment as to how and how much they might be mitigated. The information is provided in written, numerical and graphical formats. A risk matrix forms part of our report.
The main benefit for potential buyers is KEMA's objective and structured approach, which provides potential buyers with the detailed information required for strategic decision-making. The main benefit for the selling company is the availability of an objective and structured report, composed by a project team experienced in Due Diligence processes and not hindered by daily, operating business.
Our recent due diligence investigation projects include:
- due diligences on transmission networks of European Transmission System Operators (TSO)
- due diligences (including vendor due diligences) on generation assets and projects under development of utilities globally
- due diligences on Distribution Network Operators (DNO) in The Netherlands
- due diligences on wind farms globally.