Providing expert capability for a large acquisition integration
As one of the world’s largest retailers and with a presence in every US state, this company has thousands of stores serving millions of customers each week.
In 2017, this retailer acquired approximately 2000 stores from a competitor in North America in a deal valued at over $4bn. There was a strong desire to identify and accelerate synergies from the program.
The Procurement team was working at capacity and mainly focused on business as usual sourcing activities. However, the additional activity that came with synergy program would demand an immediate injection of capacity and capability. It also required the experience of running M&A programs, which Proxima was asked to support.
We deployed a team consisting of procurement specialists who knew the client well, and program managers who were familiar with the demands of synergy and integration programs. We provided M&A specific templates and tools to help order, manage, and track key activity, as well as back office support to power the on-site team.
The integration process went through four phases; 1) reviewing, 2) identifying, 3) prioritizing and, 4) delivering synergies. Our program team reported directly into the CPO and the organization’s integration team. To further support, we provided PMO support for the commercial work streams until the client had identified and assigned an internal resource.
Outcomes and Deliverables
The Synergy program ran for over a year and reported program level savings of c. $50m across OPEX and CAPEX supplier spending.
Proxima used deep category knowledge and flexible access to skills to execute ~ 60 large projects (with a further portion managed by the client team). We used our expertise to deliver across multiple categories, such as: Professional Services, IT, Facilities, Logistics, Operational Consumables, DCs, Pharmacy and Asset Protection.
We brought proven methodologies and tools, as well as knowledge of our client and key suppliers. This enabled us to accelerate the analysis and benefits identification, and move quickly into delivery:
- Using a pre-tested M&A toolkit allowed the client to quickly ramp up the program, analysis, and governance. Nothing needed to be built from scratch, and there was clear visibility to data and progress
- Cover to cover contract reviews that pulled 50 key data items from contracts. These were entered into client systems, highlighting scoping opportunities, rebates/ volume commitments, and any contractual restrictions
- Proxima sourcing leads that were specialists, quickly able to identify not only opportunities to reduce costs, but also opportunities to normalize quality and service levels across the joint estate
- A sourcing strategy for each project and an approach agreed to with stakeholders and signed off in governance, ensuring a joined up approach, expectations and outcomes