Accelerating
Our Client, who is one of the largest global consumer-focused private equity firm, engaged us in the pre-acquisition due diligence phase to validate management’s assumptions as presented in the data room on the procurement synergy opportunities across the aggressively growing Plumbing and HVAC services platform.
EP deployed a team of 2 senior managers who worked together with client’s team over a period of 1 week to deliver the output. Following day 1 review of the available data in the data room (which primarily included the Investment committee memos, opportunity overview deck and fireside chat materials provided by the sell-side and patchy info on key contracts), EP provided client with a list of priority questions that needed to be asked to the sell-side to build a better picture.
We also interviewed the CPO and CFO of the target company to validate the key hypotheses that the team had framed based on the limited information available at this stage. We also benchmarked pricing data for some of the key SKUs on a sample basis.
Based on the above approach, we framed a point of view on the maturity of the key spend categories as well as procurement maturity of the overall organization. Leveraging this insight, we suggested a further savings potential over and above what was assumed in the management’s presentation.
Findings from our output were leveraged to put an aggressive bid for the Target. On successful acquisition of the asset, we were asked to present the findings to the management, who then hired us for successive phases of value realization – a 6-week diagnostic followed to build on the findings in the due-diligence phase. And following the diagnostic findings, EP team were hired to provide the hands-on support to make the highlighted opportunities a reality.
Scope of the project included all the Direct categories (HVAC, plumbing equipment and accessories) as well as all the Indirect categories (Marketing, IT, Telecoms and Fleet were some of the key Indirect categories)
With recent acquisition of 2 companies, the platform now had a total of 6 different companies under them, and there was limited work done so far in realizing the joint purchasing potential of the group. Procurement organization of the newly formed platform was pretty lean, and thus it was critical that EP provides the added capacity and capability to make the change happen. A team of dedicated, delivery-focussed EP consultants worked hand-in-hand with the stakeholders across the companies to deliver a total of 28 distinct initiatives.
Projects were phased across multiple waves to prioritise those with high savings and low operational impact (HVAC contracts with OEM manufacturers, for instance). With EP as the change agents, Procurement could deliver maximum impact at speed and build credibility throughout the wider business.
