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Technical Due Diligence

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Definition: Technical due diligence is the systematic assessment of the technical condition, safety and regulatory conformity of plants, properties or production systems in the context of transactions. It serves to identify technical risks, maintenance backlogs and investment requirements. The analysis is carried out independently and is supported by documentation.

Practical relevance: The assessment covers plant integrity, remaining service life, maintenance history, spare parts availability and compliance with statutory requirements (e.g. BetrSichV, Pressure Equipment Directive 2014/68/EU). Methods include document audits, on-site inspections, material analyses and RBI assessments. The results influence the purchase price, warranties and risk provisions.

Decision-making perspectives:

  • Technical decision-makers: Assessment of technical weak points and modernisation requirements.
  • Purchasing/project management: Investment decision based on quantified CAPEX/OPEX risks.
  • Science: Methodical evaluation of condition and service life models.
  • Insurance/law: Documented evidence of risk and compliance review for liability questions.

Typical testing or verification methods: Document review, NDT (UT, VT), materials analysis, remaining service life analysis, RBI.

FAQ:

  • When is a technical due diligence required?
  • For company acquisitions, investments or refinancing to assess technical risks and obligations.
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