Third party due diligence services

Make your asset investments more predictable and reliable

Make your asset investments more predictable and reliable

What is due diligence?

Due diligence is the process of evaluating the current state of the project or target company’s wind/solar assets prior to an investment decision or acquisition. It is the standard and precautionary care that should be taken to make informed decisions before entering a transaction or signing a contract.

Due diligence research is especially beneficial in mergers and acquisitions, initial public offerings (IPOs), re-organisation and re-structuring, management buy-outs (MBOs), insolvencies, as well as sale and leaseback transactions.

Due diligence services ensure secure investments with realistic risk/benefit assessment for maximum financial predictability for investments, planning and use. Due diligence services also reduces the risk of liabilities and expensive rework. 

Why is third party due diligence important? 

Due diligence reviews will reduce the risk inherent in investments, planning and future use of wind/solar assets. Beyond enhancing your legal certainty and liability protection, carrying out due diligence is essential for achieving your business objectives and financial targets. Engaging a third party to conduct due diligence on your behalf ensures that you can base your decisions on detailed, impartial, and reliable results.

These third-party due diligence services are provided by professional firms that specialise in investigating and verifying information about third parties. These services can help an acquirer or investor identify and assess the potential risks associated with third parties and to make an informed decision about whether to proceed with a transaction.

What do due diligence services involve?

Third-party due diligence services can include:

• Reviewing the third party's financial statements, budget, and projections.
• Examining the third party's operations, management team and organisational structure.
• Reviewing the third party's legal documents and compliance with laws and regulations.
• Assessing the third party's risk management practices.
• Evaluating the third party's reputation and standing in the industry.

TÜV SÜD provides integrated third-party due diligence services that combine technical, environmental, sustainability and commercial due diligence. Our holistic approach can have a materially beneficial effect on the operation and value of your assets.

  • Technical due diligence (TDD)

Technical due diligence is the process of evaluating and assessing the technical aspects of a company or organisation, typically in the context of a merger or acquisition, a business partnership, or a financing round. Technical due diligence aims to identify any potential technical risks or liabilities associated with the target company, and to ensure that the company's technology assets align with the acquirer's or investor's strategic goals and objectives.

Technical due diligence services evaluate the target company's technology infrastructure, products, and intellectual property. This can include reviewing the target company's:

• IT systems and technologies, including software, hardware, and networks
• Product development processes and product roadmaps
• Intellectual property, including patents, trademarks, and copyrights
• Compliance with relevant industry standards and regulations
• Cybersecurity and data privacy practices
• Technical team and human resources
• Maintenance and Support processes

Technical due diligence consulting services are a subset of technical due diligence services that provide expert advice and guidance to the acquirer or investor.

Our technical due diligence experts analyse wind/solar project components, materials, and technical systems to identify technical, environmental, and financial risks and opportunities for investments. In addition, we determine the value and future viability of technical installations and equipment and review the efficiency and competitiveness of plant technology.

We use a holistic approach to check the plausibility of capital expenditure and operational expenditure assumptions and identify possible needs for future investments and the development of operating costs. This provides a technical perspective for evaluating whether the business and financial targets of a transaction are realistic.

  • Environmental due diligence (EDD)

Environmental due diligence is the process of evaluating and assessing the environmental risks and liabilities associated with a company or organisation, typically in the context of a merger or acquisition, a business partnership, or a financing round. Environmental due diligence aims to identify and evaluate potential environmental risks and liabilities associated with the target company so that the acquirer or investor can make an informed decision about whether to proceed with the transaction.

During the environmental due diligence process, an environmental consultant or a team of consultants will investigate and evaluate the target company's compliance with environmental laws and regulations, as well as assess any potential environmental risks or liabilities associated with the company's operations and properties.

With our expertise in local and international environmental legislation, we perform integrated analysis of existing contamination in soil or building materials, waste management (solar) and other environmental factors. We narrow down environmentally sensitive areas and estimate the potential financial risk.

  • Commercial Due Diligence (CDD)

Commercial due diligence (CDD) is a process of evaluating the potential commercial viability of a business or product. Commercial due diligence aims to identify and assess the commercial risks and opportunities associated with a proposed transaction or investment.

Commercial due diligence consulting is a service provided by consulting firms that specialise in helping companies and investors conduct CDD. The consultants typically have expertise in the industry or market in question and use that expertise to assess the potential commercial viability of the business or product under consideration.

Commercial due diligence services typically include:

• Market analysis: A review of the industry, market size, trends, key competitors, and customer segments.
• Competitive analysis: An assessment of the competitive landscape and the target company's market position.
• Product analysis: An assessment of the target company's product or service offering, including its differentiators, strengths, and weaknesses.
• Financial analysis: Examining the target company's financial statements and performance metrics to assess its financial health and growth potential.
• Sales and marketing analysis: An evaluation of the target company's sales and marketing strategy, including its channels, partners, and customer acquisition strategy.
• Operations analysis: A review of the target company's operations and supply chain, including an assessment of its manufacturing processes and logistics.
• Management and organisational analysis: A review of the target company's management and organisational structure, including an assessment of its leadership, culture, and governance.
• Legal and regulatory analysis: An assessment of the target company's compliance with relevant laws and regulations, including a review of any legal disputes or liabilities.

We cover commercial analyses and the assessment of location and market factors, considering legal requirements and general and special agreements. Commercial due diligence determines the competitive landscape, right valuation, growth opportunities, potential risks, and investments.

  • Sustainability Due Diligence (SDD)

Sustainability due diligence (SDD) is a process of evaluating the environmental, social, and governance (ESG) risks and opportunities associated with a proposed transaction or investment. The goal of sustainability due diligence is to identify and assess the potential impact of a business or product on people, communities, and the environment.

TÜV SÜD’s experts look at the current state and potential risks of your wind/solar projects to evaluate long-term sustainability value. Sustainability due diligence serves as an initial assessment in line with the guidelines in standard sustainability rating systems. We investigate sustainability scores, advise on the most suitable approach, and recommend ways to improve its rating.

WHY CHOOSE TÜV SÜD?

Third-party due diligence has a broader impact on the organisation. It is a crucial element of vendor management and risk management program. Third-party due diligence also helps organisations identify any potential legal, reputational, compliance, or operational risks associated with the third party and ensure these risks are mitigated to an acceptable level.

The benefits of performing third-party due diligence through TÜV SÜD are:

Compliance: Many industries and organisations are subject to regulations that require them to perform due diligence on their partners, suppliers, and vendors. This is especially true for heavily regulated industries, such as finance, healthcare, and defence. Due diligence helps organisations comply with these regulations and avoid penalties.

Risk management: Third-party due diligence can help organisations identify and manage risks associated with doing business with a particular vendor or partner. This includes risks such as financial, reputational, and legal risks. Organisations can protect themselves from potential harm by identifying and mitigating these risks.

Quality assurance: Due diligence can help organisations ensure that they are working with high-quality vendors and partners. This can include evaluating factors such as a vendor's track record, financial stability, and the quality of their products or services.

Cost savings: By identifying potential issues early on, organisations can avoid costly mistakes and mitigate risks before they become significant problems. This can include avoiding contracts with vendors who are likely to go bankrupt or identifying product defects before they are shipped to customers.

Competitive advantage: Due diligence can help organisations gain a competitive advantage by identifying and working with the best vendors and partners in their industry.

Reputation: By performing thorough due diligence on a third party, organisations can protect their reputation in case of any issues that arise in future, which can give them peace of mind and help them to maintain trust with their stakeholders.

Operational efficiency: By ensuring that the third parties organisations engage with meet the required standards in terms of compliance, reputation and quality, organisations can be sure that their operations are not hindered in any way.

Related services

  • What is the purpose of due diligence?

    The purpose of due diligence is:
    • To confirm and verify the information presented during the transaction or investment process
    • Identifying potential flaws in a deal or investment opportunity to avoid a bad financial transaction
    • Obtaining information that will be useful in valuing the transaction
    • To ensure that the transaction or investment opportunity meets the investment or transaction criteria

  • Why is technical due diligence important?

    Technical due diligence can assist investors in ensuring that they invest in a dependable investment or product. Technical due diligence helps:
    • comprehend entrepreneur competence
    • evaluate risks
    • thoroughly investigate the technical aspects of the product/service and its prospects
    • forecast the financial viability of the product or service

     

  • What are the types of due diligence?

    There are many types of due diligence, and the specific types that are conducted will depend on the context of the transaction or decision being made. Some common types of due diligence include:
    Financial due diligence: An examination of a company's financial information, including financial statements and accounting records, to assess its financial health and identify any potential issues.
    Operational due diligence: An assessment of a company's operations, including its management, organisation, and manufacturing processes, to evaluate its efficiency and effectiveness.
    Legal due diligence: Examining a company's legal status and compliance with relevant laws and regulations.
    Compliance due diligence: An evaluation of a company's compliance with laws, regulations, and industry standards.
    Tax due diligence: An assessment of a company's tax status and compliance with tax laws and regulations.
    Environmental due diligence: An examination of a company's environmental impact, including any potential liabilities related to pollution or waste.
    Intellectual property due diligence: An evaluation of a company's proprietary assets, such as patents, trademarks, and copyrights, to ensure that they are adequately protected and not infringing on any others.
    Human resources due diligence: An assessment of the company's workforce and human resources practices to understand the company culture, employee relations, and the potential impact on future workforce changes.
    Cybersecurity Due Diligence: Evaluating a company's cyber security protocols and infrastructure to identify potential vulnerabilities and risks.

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Technical Due Diligence
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