Technical due diligence

For acquisition teams who need a valuable insight into the many factors that will influence the decision to invest in a business. In terms of oversight it will, from multiple perspectives, identify the issues that can minimise risk and maximise the return on investment and cash flow derived from these assets.

Hickman Shearer’s advisory services provide:

Pre-deal early report – High level analysis based upon our own asset knowledge and experience, specific market research and public information. This enables an investor to quickly up-skill in terms of asset knowledge to obtain an early sense of the potential risks and benefits that will contribute towards a decision to progress with the potential investment.

Detailed report – Detailed analysis of the material issues that may impact upon an investment decision including:

Impacts on cashflow

What capital asset issues will impact upon cashflow in the future?

Asset benchmarking

Is investment in new assets required to remain competitive?
How does the production process compare with its peer group?
Is the business vulnerable to current or future regulation?
Are there material technical barriers to entry?

Capex options?

What needs to be replaced and when?
What are the alternative replacement options and at what cost?
What are my working capital funding options?

Operational capital asset risk

Evidence illustrates that the overriding majority of asset operators positively plan to invest and replace new capital assets and operate a planned maintenance programme:

To determine, prioritise and plan investment of assets
To rationalise, modernise and dispose of assets
To determine, prioritise and plan maintenance of assets
To acquire, install and accept assets

Typically, Hickman Shearer capital asset due diligence will measure and benchmark these and other relevant issues, with the performance of the target organisation, to estimate the future cash flow and capex implications on acquisition.