An M&A powerhouse: How procurement became the centre of value creation

When a leading UK firm set out to acquire another business, it identified procurement as a key lever for unlocking post-deal value. The initial due diligence revealed significant potential in procurement, but it was not designed to provide the depth of insight needed to validate the case for procurement-led value creation. To build a complete picture of the procurement opportunities, the acquiring firm engaged Efficio for specialist support.

The challenge: Carving out procurement

The client’s CFO and CPO recognised the potential for procurement to be the primary driver of EBITDA improvement in the acquisition. While the initial due diligence highlighted promising procurement opportunities, the business sought a more in-depth view that only a specialist could provide:

1. A granular definition of the potential savings
2. Credible assumptions that could be validated post-acquisition
3. A new procurement operating model aligned to business goals

The challenge was carving out a dedicated procurement workstream within an already crowded and fast-paced M&A process, while keeping it in line with existing stakeholders and partners’ activities.
 

The approach: Proving procurement’s promise

Building a robust business case

A key step was mapping the target company’s spend using the acquiring company’s procurement taxonomy. Leveraging Efficio’s category expertise and benchmarks, the client-Efficio team identified savings opportunities from expected synergies. This laid the foundation for a credible business case for procurement-led value creation.

Overcoming resistance with strong alignment and a fact-based approach

Carving out procurement from the broader due diligence workstream was initially met with resistance, particularly due to concerns such as scope overlaps and double-counting benefits.

To address this, the team implemented frequent alignment with other partners. Additionally, as the value of the carved-out approach quickly became clear, it gained strong support from the business at large.

Turning procurement savings from potential into realisation

The client-Efficio team didn’t stop at identifying potential procurement savings – they developed a phased implementation plan to ensure EBITDA impact in the upcoming financial year. The plan mapped out key milestones and dependencies, giving the client confidence that the plan was both realistic and sustainable in the long term. The client is now implementing the plan with hands-on support from Efficio, turning projected savings into real, bottom-line results.

The results: M&A with procurement at the helm

The client-Efficio team helped the business build a realistic and compelling case for the acquisition – one that positioned procurement at the heart of value creation. 

While it is not yet common to appoint a procurement-focused partner in M&A deals, this case clearly demonstrates the impact that such a move can make. With 65% of the acquisition’s total value creation plan expected to come from procurement, partnering with a specialist has been particularly vital in providing the business with a clear and achievable plan to make this a reality.