A high-tech specialty lab glass manufacturing company with multiple facilities located in several states was being acquired by an investor group that sought to retire old debt/equity and recapitalize the business to enhance/expand operations.
Pre-acquisition due diligence identified the presence of soil and groundwater contamination at each of the facilities that was estimated to cost in the millions of dollars to remedy. Neither Buyer nor Seller was willing to move forward with the transaction without a risk mitigation hedge to address the costs of potential environmental clean-up and insurance to address the potential for 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 identified contamination at the sites, mitigating the remedial risk for both Seller and Buyer to allow the transaction to close. TRC also worked closely with the insurer during the underwriting process which resulted in development of an environmental insurance policy covering third-party property damage and toxic tort claims.
Since 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. Furthermore, as a result of TRC’s successful environmental liability management and clean-up execution program, the original Buyer was recently able to sell the Company to another Private Equity firm and maximize the enterprise value of the business.
Client
Project Location
New York & New Jersey