Procurement M & A

Experience has shown that early engagement of Procurement in the deal cycle leads to accelerated value capture. Successful integration – or separation – of the Procurement function is reliant on a deep understanding of the new organization’s spend profile and day-to-day category management activities, identification of appropriate requirements to ensure business continuity, and design of an operating model that is aligned with the organization’s business objectives.

The benefits

• Identify total value to the transaction through a clear understanding of the spend of the combined or separate entities and procurement’s key value drivers
• Maintain supply continuity and operational integrity associated with third party agreements through a focus on contract transition
• Expose opportunities to rationalize spend, align processes, rationalize technologies, and harmonize organizations through Day 1 readiness planning 

How KPMG can help

In Procurement M&A, KPMG believes there are a few primary focus areas where the Procurement function must be a leader to drive greatest benefits from a transaction:

• Spend and Procurement Synergies: Understanding the changing spend profile will help manage synergy capture or dis-synergy minimization after the deal is executed
• Supplier Contract Transition: Proactive contract management is critical to the deal lifecycle to ensure operational continuity, synergy capture, and volume commitment management
• Procurement Operating Model Readiness: Procurement’s Day 1 operating model should be consistent with the new organization’s business objectives, taking into account opportunities to harmonize and simplify processes, consolidate redundant or implement new systems, and refine the procurement organization to reflect desired skills and competencies