Technical Due Diligence

The price is agreed on what the asset is worth today. What it costs to own is decided by what has been deferred, what is approaching end of life, and what is not compliant — none of which appears in the financials. Technical due diligence puts numbers against those before the deal closes rather than after.

What the assessment covers

• Asset conditionPhysical inspection of the plant, equipment, structures or property, assessing actual condition against age and against how it has been used.
• Remaining service lifeHow long each major asset or system has left before replacement, which determines the timing of expenditure rather than merely its existence.
• Deferred maintenanceWork that should have been done and was not, quantified — the single largest hidden liability in most transactions, and the one a seller has the greatest incentive to leave undisclosed.
• Regulatory complianceStatutory inspection status, expired or missing certification, permit conditions and any enforcement history attaching to the asset.
• Design and documentation reviewWhether the as-built documentation, drawings and maintenance records actually reflect the asset, and what it means if they do not.
• Capital expenditure profileIdentified expenditure phased over one, three, five and ten years, so the buyer sees the shape of the commitment rather than a single figure.
• Technical liabilitiesContamination, structural defect, obsolescence, and systems that cannot be maintained because parts or support no longer exist.
• Operating cost driversEnergy performance, maintenance burden and reliability history, which affect the ongoing cost as much as the capital position does.

What the report gives you

Findings are quantified and phased. An issue costing a hundred thousand dirhams next year affects a transaction differently from the same amount in year eight, and a report that lists defects without timing or cost cannot be used in a negotiation.

Urgent items — safety, compliance and imminent failure — are separated from planned lifecycle expenditure, because the first affects whether the deal proceeds and the second affects the price. Assumptions and limitations are stated explicitly, including anything that could not be inspected and what that means for confidence in the figures.

Assets covered

• Industrial and manufacturing facilities
• Process plant, refineries and terminals
• Power generation and utility assets
• Commercial, retail and mixed-use property
• Hotels and hospitality assets
• Warehousing, logistics and cold storage
• Marine assets, ports and vessels
• Equipment fleets and rental portfolios

When it is commissioned

• Acquisition, ahead of price agreement or during an exclusivity period
• Disposal, where a seller wants to know what a buyer will find
• Refinancing, where a lender requires independent assessment of the security
• Portfolio review, establishing a comparable baseline across multiple assets
• Pre-lease and pre-handover, before taking on repairing obligations
• Joint venture formation, where assets are being contributed
• Insurance placement, alongside valuation and risk engineering

Working to your timetable

Due diligence runs on a deal timetable, not a technical one. Scope is agreed against the time available, and where the window does not permit full assessment we say what has been covered and what has not, rather than presenting partial work as complete. Access constraints during a confidential process are normal and are planned around.

Independence

ITMAD is an accredited inspection body and has no interest in whether a transaction proceeds. We do not act on a success fee, we do not broker the assets we assess, and we do not carry out the remedial work we identify. The findings are reported as found to whichever party instructed us.

Related services

Technical due diligence is commonly commissioned alongside valuation, where the same inspection informs both asset condition and value, and alongside risk engineering where the insurance position forms part of the assessment.