Obsolescense should be a key point?
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Good morning,
During my last DD process in an industrial company, we did not take in account anything related with the obsolescence of the facilities, and after the transaction it became a key issues, because of the CAPEX we needed after in order to run the company.
What do you reckon? Should it be taken in account with the same depth as other issues have? What is your experience?
Regards
César Otero
Hi. It is often the buyer who will have to invest in maintenance/development of the plant when the seller did not do that at a required level. This is certainly a risk and should be paid attention to. However, assessment of this risk will require some specific technical knowledge to check if this or that facility was financed properly and if it is in a proper condition to be used without some extra CAPEX.
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