Guidelines for Process Safety Acquisition Evaluation and Post Merger Integration

Since 1985, the Center for Chemical Process Safety (CCPS) has been the world leader in developing and disseminating information on process safety management and technology. CCPS, an industry technology alliance of the American Institute of Chemical Engineers (AIChE), has published over 80 books in its process safety guidelines and process safety concepts series, and over 100 training modules through its Safety in Chemical Engineering Education (SACHE) series.

• Executive Summary 1Why this Guideline? 1Chapter 1 An Overview of Process Safety 3Chapter 2 The Merger and Acquisition Process 5Chapter 3 Screening Potential Candidates 7Chapter 4 The Due Diligence Phase 9Chapter 5 Developing the Integration Plan 13Chapter 6 Implementing the Integration Plan 18Chapter 7 M&A In The Future 22The Appendices 241 An Overview of Process Safety 271.0 Courtney's story – continued 271.1 Why this Guideline? 281.2 Understanding the basics 311.3 Hazard versus Risk - Is there a Difference? 321.4 Good Injury Rate Does Not Equal Good Process Safety Performance 341.5 Understand the Hazards of Chemicals Handled on Site 361.6 Don’t forget about the Dust Explosion Hazard 401.7 Unique Considerations at Facilities that Handle HHCS 411.8 Resources for Process Safety 432 The Merger and Acquisition Process 472.0 Courtney’s story – continued 472.1 Changing World of Corporate Profiles 482.2 Overview of the M&A Process 492.3 Scalability (big/small; single site verse multiple site deals) 522.4 Key Terms and Concepts 532.5 Process Safety in the M&A process 572.6 Financial Strategists can have high impact on process safety systems 603 Screening Potential Candidates 633.0 Courtney’s story – continued 633.1 Using Public Domain Information for Screening 643.2 Using a Checklist to Identify Potential Process Safety Issues 744 The Due Diligence Phase 774.0 Courtney’s story – continued 774.1 Introduction 784.2 The Divestment Due Diligence 814.2.1 The Checklist 824.2.2 The Internet and Intranet Searches 824.2.3 Pre-site Visit Review 834.2.4 The Due Diligence Site Visit and Document Review 844.2.5 Vendor Due Diligence Report 874.2.6 Valuation 894.2.7 Data Room 914.2.8 Question and Answer Management 944.2.9 Reverse Due Diligence 964.2.10 Did the Deal Close? 1144.3 The Acquisition4.3.1 The Internet Search and Initial Data Gathering 994.3.2 Vendor Due Diligence Report 1004.3.3 Data Room 1004.3.4 Due Diligence Valuation for Bid 1034.3.5 Pre-site Review 1044.3.6 The Site Visit and Document Review 1074.3.7 Due Diligence Report and Valuation 1104.4 Did the Deal Close?5 Developing the Integration Plan 1175.0 Courtney’s story – continued 1175.1 Developing the Integration Plan and Process 1185.1.1 Step 1- Establishing the Boundaries for the Integration Process (i.e. Establishing the Integration Strategy) 1205.1.2 Step 2 - Establishing the Expectations for the Process Safety Program 1245.1.3 Step 3 - The Process Safety Integration Team 1275.1.4 Step 4 - Assessing the Gap between the Current Approach and Expectations 1315.1.5 Step 5 - Developing the Action Plan 1366 Implementing the Integration Plan6.0 Courtney’s story – continued 1536.1 A Generic Change Model 1546.2 The Integration Path Forward 1606.2.1 Step 1 - Get the 'hearts’ of the newly acquired business leads to accept the Vision and Strategy for the integration process 1606.2.2 Step 2 - Appointing and chartering Integration Implementation Teams 1616.3 An Alternate Bottom-Up Approach to Integration 1756.4 Differences Between Facilities, Business Units 1786.5 Step 3 - Working Through the Implementation Itself 1797 M&A in the Future 1857.0 Courtney’s story – continued 185The Appendices 193Appendix A – M&A Process Safety Checklist 193M&A P.S. Checklist – Commercial Evaluation Phase 194M&A P.S. Checklist – The M&A Team 201M&A P.S. Checklist – Data Room Information 203M&A P.S. Checklist – Planning the Site Visits 217M&A P.S. - Issues to Be Investigated During the Site Visits 219M&A P.S. Checklist - Process Safety Issues to Be Considered 235M&A P.S. Checklist - Assessing Major Hazard Risks 241M&A P.S. Checklist - Process Safety Management & Culture 245M&A P.S. Checklist - Process Safety Staffing Issues 253M&A P.S. Checklist - Hazard Identification Issues to Evaluate 255M&A P.S. Checklist – Management of Change Issues to Investigate 257M&A P.S. Checklist - Mechanical Integrity Issues to Investigate 261M&A PS Checklist – Process Safety Issues to Examine 265M&A PS Checklist - Process Safety Procedures to Examine 267M&A P.S. Checklist – P.S. Audit Issues to Consider 271Appendix B – An Exemplar Integration Plan & Budget 273Guidance for Using the Plan and Budget Spreadsheets 275An Exemplar Integration Plan 279Exemplar Integration Budget 301References 309Index 313