Change of business ownership or structure is a complex process raising potentially significant operational and procurement risk. Efficio can help reduce risk and enhance value for both buyer and seller.
Efficio’s Carve Out Support service provides essential support to businesses undergoing a change of ownership. Whenever a business changes hands, such as through mergers and acquisitions, both outgoing and incoming owners have an interest in ensuring that the supply chain can continue to support the business. Similar issues arise when separating out, or reintegrating, subsidiary business units.
Efficio has unrivalled experience in assisting owners through the divestment process. We give you rapid access to expert personnel and technologies, and we provide strategic support to help you maximize the value of your business.
Our client base includes financial services companies such as The Co-operative Bank, which needed to ring-fence, separate or spin off activities. Companies moving into, out of or between Private Equity ownership face comparable challenges in ensuring that the supply base is positioned to support future performance.
Mergers and acquisitions present an ideal opportunity to review procurement provisions and strategies, and renegotiate, replace or rescind contracts as appropriate. For example:
- Change of ownership may require novation or reassignment of the contract
- Restrictions on the rights to use may need to be renegotiated
- Volume-related prices may no longer be appropriate
- Central contracts held by the previous owner may need replacing
How we work
Efficio’s Carve Out Support service will enable your business to maximize supply chain opportunities with minimum disruption. Our team provides support in the following areas:
- Data collection: We collate all relevant contracts and establish basic data such as starting and expiry dates, signatories, legal addresses. A central repository for procurement and contract data is ‘best practice’ but is often fragmented or non-existent
- Legal review: Together with your legal and contractual teams, Efficio will streamline contracts and highlight where the change in ownership is creating a gap in provision. Current or imminent supply disputes will also be flagged
- Treatment strategies: We work with your Board, senior officers and stakeholders to ensure procurement is aligned with the overall business and ownership strategy
- Supplier engagement: Efficio will maintain supplier relationships throughout the change of ownership and engage with them to arrange novation of contracts, any necessary renegotiation of terms or in some cases contract termination
It is vital that you identify all the suppliers and supply processes of direct and indirect goods and services that could pose operational risks. Efficio ensures that strategies for each case are drawn up, negotiated and implemented in good time. We work not only with Procurement teams, but also representatives from Finance and Treasury, legal advisers, IT, the users of goods and services and other functions such as HR and Compliance Officers.
Extract the maximum value from divestment
Ultimately, Efficio’s Carve Out Support service will allow you to extract the maximum value from divestment, acquisition or restructuring processes without disrupting the ongoing operations of the business.