“Our decision to acquire the target company was directly impacted by the OnDemand analysis. I am extremely happy with the work and will continue to use OnDemand for similar projects going forward.”
A private equity firm was investigating a potential acquisition of a $600 million industrial manufacturing organization that it believed could complement other businesses within its portfolio. It was thought that by implementing strategic changes in the manufacturing and procurement processes, the client would be able to capture significant positive post acquisition EBITDA impact. Due to a lack of internal subject matter expertise, the client sought the assistance of OnDemand for the analysis.
During the 30-day exclusivity period, OnDemand worked in close collaboration with the target organization to establish a thorough understanding of the operational aspects of their business. OnDemand subject matter experts visited all U.S and international manufacturing sites and carried out a detailed assessment determining the potential for process and procurement improvements.
The team looked to identify opportunities in two key areas. The first, was determining whether current internal manufacturing operations at the target organization could be improved upon. OnDemand worked to identify new technologies and industrial practices that could be leveraged to improve process efficiencies and reduce costs.
The second area of focus was to investigate the potential cost savings that could arise through strategic sourcing initiatives. OnDemand provided the client with a detailed analysis of the benefits that would accompany integrating the target into the larger supply chain and procurement network its existing portfolio offered.
OnDemand outlined a series of industrial processes and technological improvements that would significantly reduce costs at the target organization. An opportunity was identified to consolidate manufacturing and production to fewer plants. Further recommendations suggested it was possible to drastically reduce the time taken to produce goods while minimizing waste. The analysis outlined that these improvements would provide the business with a full return on investment in less than six months.
From a procurement point of view, the effort identified more than $20 million in savings and direct EBITDA impact, of which $5 million could be realized almost immediately.