struttman consulting
 
 
 
 
Client Results
Reduce Costs
  CC102
  CC104
Expand Revenues and EBITDA
  CC110
  CC115
  CC106
Grow Strategically
  CC111
Grow Strategically

Summary—111

An energy service company had the opportunity to purchase an engineering/construction company at an attractive price and needed to make a quick, informed decision. In order to proceed, it was crucial to accurately identify the value of the transaction, including equipment condition, management capability, and production systems.

We performed technical due diligence to support decision-makers during negotiations. Throughout the process we identified the total capital investment required to sustain the targeted investment’s operations. A deal optimization value of $50 million over five years was identified and an integration roadmap was designed.

Challenges
Quantifying the risks of the targeted acquisition
Assessing asset condition and throughput capacity
Evaluating management capabilities
Accurately creating a capital plan to sustain operations
Quantifying the total deal optimization value and the strategy for its achievement

Results
$50 million optimization value achieved by increasing productivity and utilization through industry benchmarking
$170 million CAPEX ($70 million required in the first 2 years, $170 total within 5 years)
Determined that 20% of the fleet was not serviceable; the remaining equipment life of the fleet was at 32%
  
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