As the economy continues to struggle, we see more consolidation in the aggregate industry.  Deals that seems like a bargain, may include significant problems and liabilities.  It is more important than ever to know what you are getting when acquiring existing operations.  An acquiring company should not assume that all permits are in order simply because operations are occurring.

6735-monroe image for blogIn addition to making sure that all necessary permits have been issued and have not expired, the acquiring company should look at the permit conditions to determine

  • Is the operation currently in compliance?
  • Are there deferred obligations that will fall to the acquirer?
  • Are the permits transferable/assignable and what process is required to do so?
  • Are there bonding requirements that the acquirer will have to assume?
  • What are the reclamation requirements?
  • Does the permit extend to the entire property or will expansion permits be needed?
  • Is there a general water discharge permit or a site-specific permit and when will these permits expire and require renewal?

If you are acquiring the business rather than the property, ensure that deeds, leases, and permits are in the name of the entity to be acquired or you may not get everything you expected.

As we all know, a little extra effort up front can avoid a host of problems down the road.