DNV Consulting UK recently carried out the environmental due diligence of DFS – a UK-based sofa manufacturer and retailer – as part of a proposed €670 million deal regarding public-to-private management buy-out.
DFS is currently listed on the London Stock Exchange. However the buy-out team now plan to purchase all the publicly-traded shares. The proposed deal means that DFS will be run as a private company.
In order to accurately value the company, the buy-out team needed to be aware of all current and potential future costs and legal liabilities associated with environmental, health and safety issues prior to making the bid for DFS. DNV’s client, Nomura Bank, provided the majority of the finance.
Assessment
DNV Consulting conducted a review of the whole DFS business, including an assessment of all 65 retail outlets as well as conducting audits of the main sofa manufacturing facilities. One of the potential concerns with large portfolios such as this is the cost and liability associated with contaminated land. DNV Consulting therefore used a contaminated land screening tool, which enabled the rapid assessment of the portfolio.
“Environmental due diligence is now a standard and increasingly important process in most mergers and acquisitions transactions,” says Hayden Morgan in DNV Consulting, London.
So far, so good; The Environmental due diligence group have also seen other positive developments since its start:
BP's Panel of Consultants
DNV has been accepted as one of four onto BP's approved Panel of Consultants for the provision of safety, health and environmental due diligence. This means that DNV will now be included in any ‘request for proposal’ associated with future acquisitions, divestments etc.
British Venture Capital Association
Furthermore, DNV Consulting has been awarded associate membership of the British Venture Capital Association, (BVCA), after being nominated by three private equity firms. The BVCA represents the vast majority of private equity houses in the UK.