Commercial Due Diligence
Divestment, Acquisition and Beyond
In today’s rapidly changing energy industry, it’s more important than ever for utilities to have a clear picture of their asset value. Given the many future unknowns around technology and speed to market, regulations, decarbonization, and more, this information allows for scenario planning and agility as operating environments and requirements evolve. Two key aspects of this commercial due diligence are capital expenditure, from the perspective of divestment or acquisition/investment, and providing an external view of the value of assets for the purpose of future reference or CapEx considerations to expand, revamp or modify the asset(s). These may include power plants, PV fields, storage facilities, electricity networks, etc., with values typically above $50M USD.
Divestment Perspective
When an asset owner decides to divest an asset and board resolutions to do so are signed off, UMS Group can help with the intensive process to make sure the right information gets into the data / deal room, giving the owner an accurate perspective on market value, defining a divestment strategy, and profiling potential candidates.
Acquisition Perspective
On the other side of the coin, for investors, the asset can be highly attractive for various reasons, i.e. portfolio diversification or because there may be still be an attractive business case for 15+ years. Typical investors (such as Private Equity, Venture Capital, Family Offices and Sovereign Wealth Funds) often lack the in-depth industrial knowledge, but are well aware of the business opportunity. As in the divestment case is relevant, UMS Group helps potential investors with assurances that what is presented in the data / deal room corresponds to independent research (due diligence), allowing for preparation of an accurate feasibility study for an investment decision and an offering strategy.
How We Work With You
UMS Group ‘Stand Alone’
• Providing the link between “financial data” and “engineering expertise”
• Our flag reports are greatly appreciated by Investment Committees
UMS Group ‘Subcontractor’ of Main Due Diligence Partner
• We often work as subcontractor for Engineering firms and/or Financial advisors • We enable an early identification of green and red flags; we than support the Engineering firm and/or Financial advisor with a deep dive and/or root cause analysis
Bespoke Due Diligence Services
We bring value through rigorous analyses, deep industry and best practice knowledge, and strategic partnerships.
- Cost and performance related analyses using peer-group benchmarking
- Assessment of Information Memoranda: structuring or exploring
- Gap & Opportunity analysis in connection with sites or stand-alone assets, such as gas fired powerplants or any hydrocarbon-based feedstock industry, nuclear generation, grids, Wind and PV installations
- Commercial feasibility studies.
- Identifying and contextualization of critical success factors to improve client’s understanding of all the relevant issues to drive informed decisions (through, among other aspects, underlining strengths to leverage and/or weaknesses to mitigate)
- Comprehensive assessment of client’s business plan in the context of market conditions and the industry landscape
- Probing corporate strategy and diagnostics of (under) performance, providing a ‘Projects For Improvement’ prioritization list and implementation roadmap, with both qualitative and quantitative objectives
Bespoke Reports for Both Buyers and Sellers Involved in the Acquisition Process
Vendor
1.) Implementation ISO55000 AM & Risk Management
2.) Best Practices Support
3.) Comparative Analysis to Focus Management Agenda
Bidder
Market Assessment (Grid Companies, Gas Storage, Power Plants, Water Companies)
Vendor
KPI’s to put performance into perspective (Reliability, Safety, OPEX, CAPEX, FTE, etc.). Risk Assessment
Bidder
KPI’s to put performance into perspective (tailored to peer group)
Vendor
Tailored Analysis, Support Preparation Q&A
Bidder
Data room analysis & support, by comparing key figures with peers, gap analysis. Flag report on key items
Due Diligence Support for Production, Transmission, Distribution and Commercial Management
Power Production
- Gas Fired Power Plants (including mothalling/restart data
- Coal & Ignite Fired Power Plants
- Hydro Plants
- Steam Supply & District Heating
- Solar & Wind
Transmission & System Operations
- Power Transmission
- Assuring System Security (Methods, Costs)
- Gas Storage & Transmission (limited)
- Data from every continent (but Antarctica)
- Data from small and large companies, in desert and under arctic conditions
- Library of ‘common & best practices’
Distribution
- Power & Gas Distribution Data
- SAIDI/SAIFI root cause analysis for developing nations as well as developed nations
- Grid loss reduction programs
- Smart Meter Practices
Commercial Management
- Margins in trading, retail, asset management
- Option Valuation
- Contract Valuation
- Flexibility Valuation (Industry, Storage, Plants)
- Costs of ‘greening’
Power Production
- 20+ years of benchmarking experience, with experts based in USA, Europe and Australia
- (De-)Mothballing Projects
- Biomass Conversion Projects
- Renewable Subsidy Regimes (selected European countries)
Transmission & System Operations
- 20+ years of benchmarking experience, with experts based in USA, Europe and Australia
- Regulatory Regime (selected countries)
- “Deep dives” on various topics (losses, RAB, Regulatory Power, FTE’s, IT Architecture, etc.)
Distribution
- 20+ years of benchmarking experience, with experts based in USA, Europe and Australia
- Regulatory Regime (selected countries)
- “Deep dives” on various topics (losses, RAB, Regulatory Power, FTE’s, Smart Meters, etc.)
Commercial Management
- Dedicated team headed by former trading manager with extensive experience in Due Diligence
- 5+ years of commercial management projects in Europe, China and Australia
Excerpt of Experience
KPI’s for initial assessment of Power Plants during Due Diligence are typically selected from:
KPI’s for Transmission / Distribution Companies for initial assessment are typically selected from:
Recent Due Diligence projects include:
Why UMS Group?
33 years of industry benchmark intelligence to be used to position client’s (asset) performance
Niche expertise to convert data into client specific intelligence, enabling scenario analyses and robust decisions
~ 100 man-years of experience in developing strategic roadmaps, investment and divestment advise, deal structuring, and performance improvement implementation plans
Unique advisory able to offer peer comparisons in connection with the Energy Transition, from generation through consumer delivery, and from upstream-to retail downstream
Association with the best industry related expert law firms, for any legal Due Diligence as potential part of a DD engagement
Association with specialized certified accountants for financial sign-off
Association with specialized engineering companies for technical assessments
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