A master limited partnership client engaged in the gathering, transportation and storage of crude oil and refined products acquired the crude oil terminal and pipeline assets of a major utility company. A valuation of the tangible and intangible assets in support of a purchase price allocation was required for both financial and tax reporting purposes. There were no detailed fixed asset records with historical data available to assist in the identification and valuation of the tangible assets being acquired.
Our professional staff utilized a multi-approach methodology to overcome data limitations. A representative sample of the assets was physically inspected to identify and confirm the existence and condition of the major tangible assets. Next, our professionals reviewed the technical review documentation that was developed by an independent engineering firm. Finally, our staff used a modeling approach for any properties that were not physically inspected. Through a combination of approaches, we were able to ensure that all tangible assets being acquired by our client had been included and appropriately valued in our analysis.