Pre-Acquisition EHS Due Diligence | Safety Consulting | Greenberg Safety
When a company is acquired, its safety liabilities come with it. We conduct independent on-site assessments that identify OSHA exposure, EMR risk, and compliance gaps before they become the buyer's problem.
An acquisition transfers more than assets. Open OSHA citations, an elevated Experience Modification Rate, undocumented hazards, and a workforce trained below the regulatory minimum don't disappear at closing, they transfer to the new owner along with the equipment, the contracts, and the employees. A pre-acquisition EHS assessment gives buyers a clear picture of what they're inheriting and, more importantly, what it will cost to bring it into compliance.
We conduct independent EHS due diligence assessments that cover the full scope of environmental health and safety liability. The engagement includes an on-site inspection against applicable OSHA standards, a review of the target company's written safety programs, analysis of OSHA 300 logs and recordable incident history, EMR and workers' compensation claims history review, training record verification, and identification of any open citations, pending inspections, or regulatory actions. The result is a written report with findings, risk ratings, and remediation cost estimates, the documentation a deal team needs to negotiate price, structure indemnification provisions, or make an informed go/no-go decision.
Acquisition timelines are compressed, and we work within them. We can mobilize for an on-site assessment within days and deliver a written report within one week of the site visit. For multi-site transactions, we coordinate parallel assessments and deliver a consolidated report that gives buyers a single view of aggregate EHS liability across the portfolio.
What is pre-acquisition EHS due diligence and when should it happen in the M&A process?
Pre-acquisition EHS due diligence is a structured assessment of a target company's environmental liabilities, OSHA compliance record, and safety program before the transaction closes. It should happen during the due diligence phase, before binding commitments are made, so findings can inform purchase price adjustments, representations and warranties, escrow holdbacks, or in serious cases, a decision not to proceed. Post-closing discovery of significant EHS liabilities, including open OSHA citations, unreported incidents, or environmental contamination, is far more expensive to remediate than a pre-closing assessment.
What safety liabilities transfer to the buyer at closing?
The scope of what transfers depends on deal structure. In an asset purchase, buyers generally avoid pre-existing liabilities, but this is not absolute: OSHA citations that have not been abated transfer with the business operations, and a compliance officer can cite the new owner for pre-acquisition conditions. In a stock purchase or merger, all liabilities transfer to the buyer, including undisclosed or unreported incidents, open citations, ongoing OSHA investigations, and workers compensation exposure. EHS due diligence quantifies these exposures before the deal closes.
What does a pre-acquisition EHS review examine?
A pre-acquisition EHS review covers: OSHA 300 log analysis for the past three to five years including recordable incident rate, severity, and trends; review of any open or closed OSHA citations and abatement status; assessment of the written safety program against applicable standards; workers compensation loss runs and EMR history; environmental compliance status including permits, waste disposal records, and spill history; a facility inspection for visible hazards; and interviews with operations and safety personnel. The deliverable is a report that quantifies the risk exposure and recommends specific deal terms or corrective actions.