TRC

Manufacturing Portfolio Environmental Risk Resolution

Through our Exit Strategy® program, TRC structured a Guaranteed-Fixed Price Remediation (GFPR) contract to mitigate the risk of clean-up cost overruns attributable to pollution at the sites, resolving the remedial risk for both the seller and buyer.

Industries

Client

Manufacturing Company

Project Location

New York & New Jersey

A high-tech specialty lab glass manufacturing company with multiple facilities located in several states was put to bid. An investor group sought to acquire the business, retire old debt/equity and recapitalize the business to enhance/expand operations.

Pre-acquisition due diligence identified the presence of millions of dollars of soil and groundwater contamination. Neither Buyer nor Seller was willing to move forward with the transaction without a risk mitigation hedge to bracket the costs of potential environmental clean-up and third-party claims for bodily injury and property damage.

TRC structured a Guaranteed-Fixed Price Remediation (GFPR) contract to mitigate the risk of clean-up cost overruns attributable to pollution at the sites, resolving the remedial risk for both Seller and Buyer. TRC also led the underwriting process which resulted in development of an environmental insurance policy covering third-party property damage and toxic tort claims. Post-closing, TRC has been successfully executing the clean-up and also took the lead in resolving the site’s alleged natural resource damages liability at all applicable sites.

The deal closed. Environmental clean-up risk was resolved to satisfaction of both Buyer and Seller.

Five years later, Buyer optimized Exit Value. As a result of TRC’s Exit Strategy® environmental liability management and clean-up execution program, Buyer was recently able to again sell the Company to another Private Equity firm and to maximize the enterprise value of the business.