Chemical Consulting: Transaction and M&A Support

Challenge: Chemical was retained as an independent technical advisor to the project sponsors of a venture to construct a US chlor-alkali facility.

Solution: We advised the lenders on the major technical issues that could lead to delay, cost overruns, performance shortfalls and any other technical or operating risks that could have an impact on the sponsor’s ability to service its debt.

Results: The client received multiple services, including technical reviews, plant operations, construction, cost schedules, site integration, permitting, contracts, environmental compliance and financial analysis. As a result of our site visits to monitor construction, the project sponsor received updates.

Challenge: Chemical was retained to act as independent engineer for a chlorine, caustic and calcium chloride facility in South America.

Solution: We performed technical due diligence to include reviews of project design, construction and operating plans, completion tests and guarantees, along with project operations and maintenance. We visited the site to assess suitability and reviewed all project agreements as well as the status of project permits and licenses. The client provided project proforma, and we assessed capital costs to confirm reasonableness of assumptions and accuracy of results.

Results: We confirmed project compliance from an environmental and social standing and were subsequently engaged to monitor monthly construction, performance and operations.

Challenge: Chemical was hired to provide market and business analysis, as well as asset valuations for the combined assets of two integrated fibers producers. The two companies’ assets included nylon, spandex and polyester resins and fibers, as well as their respective intermediates products.

Solution: We worked with the financial advisors and the sponsor to create asset valuation models based on discounted cash flows and factored replacement costs. The business and market evaluation included competitive cost comparisons, market share evaluations and market segment analysis.

Results: The analysis was used to syndicate the debt offering.

Challenge: A private equity firm hired Chemical to help assess a global plastics styrenics business.

Solution: We conducted a multi-phase due diligence approach that encompassed analysis of raw materials, markets, manufacturing and economics. We provided an in-depth market analysis along with a company analysis focused on assessing management projections, restructuring plans, product development and development of a financial model. We developed a market evaluation and competitive assessment for five global engineering plastics business lines. We developed market profiles and cost and margin models for the engineering plastics, as well as for integrated upstream positions in feedstocks and intermediates. We subsequently performed an in-depth data room review followed by multiple manufacturing site visits and assessments in the US, Europe and Asia. Our investigation focused on manufacturing asset condition, operability, technical proficiency in manufacturing, and associated product and process development capability.

Results: Each phase was completed with a diligence presentation designed to meet the needs of financial institutions.

Challenge: Chemical was retained to witness the construction of a petrochemical project in an industrial development in the Middle East.

Solution: In this capacity, we discussed with senior management the current progress and toured the site to witness construction.

Results: The client received multiple reports that kept senior management updated on current progress and summarized key findings of site visits.

Challenge: Chemical was retained to help a financial institution understand the overall viability of financing a US$100 million propylene purification splitter in Latin America.

Solution: We developed a financial model of the splitter.

Results: The client received 15-year cost and revenue projections, scenarios of potential periods of cash flow deficiencies and recommendations on hedging risks associated with the product-to-feedstock gross margin. The client also received our commentary on market fundamentals, competitors, expected end-use markets and potential propylene derivative investments.