Merger & Acquisition Services

Optimizing Procurement Functions for M&A

Synergies in a merger or acquisition lead to nearly 50 percent of savings to be captured by the integrated organization. With the right strategies and approach, you can realize these savings as you transform the procurement function of the entity.

GEP Due Diligence

Before the merger or acquisition, GEP conducts a detailed spend analysis and designs a procurement transformation plan. A typical plan involves cost reduction, cash flow impact on a monthly basis and realization timelines including:

• Quick-win opportunities that can spin-off savings within the first month
• Medium-range sourcing opportunities that can generate savings within 2 to 4 months
• Longer-term plans based on categories with contractual commitments, demand management, procurement organizational change and implementation of best practices

Integrating an Acquisition

In the integration phase, there is often a lack of clarity on whether the merger or acquisition is already closed and if there are actual savings and synergies. In GEP's experience, the difficulty can usually be traced to:

• Lack of spend visibility for planning and forecasting
• Lack of procurement expertise
• Lack of experience identifying cross company opportunities and integrating two separate procurement organizations

GEP procurement transformation plan can help identify and leverage these opportunities in the first few months after the deal closes, directly improving the combined company's bottom line.

Related links:
Procurement Transformation, Organizational Design, Logistics Optimization, Supply Chain Management