Supply chain in M&A integration and divestments

In Strategy and Transactions

Whether it’s an M&A integration or a divestment and separation, an upcoming transaction provides a unique opportunity to transform your supply chain operating model.

Related topics Supply chain Strategy and Transactions Mergers and acquisitions Divestitures

The team

Jeff Schlosser

Jeff Schlosser

Principal, Strategy and Transactions, Ernst & Young LLP

Hani Alexander

Hani Alexander

EY US Supply Chain and Strategy and Transactions

What EY can do for you

Supply chain is a major M&A value driver for enabling topline growth, achieving operational synergies, preserving capital expenditures and improving cash flows. It also impacts almost every corporate function and internal and external stakeholders.

Our supply chain team, with its proven methodologies, M&A and industry experience, and leading tools and enablers, can help you realize short-term and long-term deal value while working to ensure business continuity and operational success on Day 1. Among the ways we can help:

  • M&A diligence and integration

    • Review clean room data during due diligence to estimate synergy potential in the deal
    • Help develop sign-to-close, post-close plans (30, 60, 180 days)
    • Assist with structuring an overall supply chain integration strategy and two-year road map
    • Support the capturing of cost synergies in acquisitions through external spend reduction, manufacturing and distribution network optimization and other levers
    • Help design Day 1 and future-state operating models for the supply chain function
    • Identify opportunities to outsource, insource and co-source for NewCo
    • Reconfigure the supply chain network to align to NewCo business strategy

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  • Divestitures and operational separation

    • Help develop a supply chain separation strategy based on deal perimeters
    • Minimize cost dis-synergies and identify stranded and one-time costs for RemainCo
    • Support the design of Day 1 and future-state operating models for the supply chain function
    • Identify entanglements in assets and product/financial flows
    • Identify requirements related to transition services agreements (TSAs)/transition manufacturing agreements (TMAs) with appropriate service levels; review any reverse-TMA requirements for products manufactured at shared locations
    • Analyze and drive the disposition and/or conveyance of supplier contracts, assess loss of leverage and outline supplier negotiation strategies
    • Develop detailed separation plans, roles and responsibilities and timelines

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  • Value creation

    • Help improve overall margin through rapid value capture using a combination of levers such as operating model redesign, spending, manufacturing and distribution networks and working capital optimization
    • Apply advanced operational analytics to identify high-potential opportunities
    • Support the development of a supply chain transformation strategy and draft/execute 30-, 90-, 180-day plans

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Explore our solutions and technology

 

How EY can help

Strategy consulting

EY-Parthenon professionals recognize that CEOs and business leaders are tasked with achieving maximum value for their organizations’ stakeholders in this transformative age. We challenge assumptions to design and deliver strategies that help improve profitability and long-term value.

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Corporate finance consulting

Our corporate finance consultants help corporates, private equity, governments, sovereign wealth funds, private and family businesses, and educational institutions with their key financial issues.

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Buy and integrate: M&A advisory

We help enable strategic growth through better integrated and operationalized mergers and acquisitions, JVs and alliances. In particular, we help companies refine their growth strategy, perform deal sourcing, conduct diligence and valuation, and implement M&A integration.

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Sell and separate

Our divestiture services can help you optimize your portfolio to improve value from the sale of a company, carve-out, spin-off or joint venture.

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Reshaping results

We help you respond to the challenges of COVID -19, providing trusted leadership in these urgent, critical and complex situations to help you recover and preserve value for a better future.

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Transaction tax, law and workforce advisory services

For companies considering a transaction, it is critical to develop a holistic strategy to properly react, recover and shape their futures. Focusing on the tax, legal, and workforce consequences of transformational change, we help you maximize value with integrated solutions.

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