OVERVIEW:

In our view, procurement should consistently be a top value creation priority given the potential for rapid, measurable EBITDA impact.

• The best time to strike is typically within the first 100 days, with goal setting and initiative planning beginning during due diligence or immediately post-close.

• Sizing the prize early ensures procurement is prioritized appropriately; a high-level savings range can be inferred with basic inputs from financial statements and a brief management interview. Higher confidence projections for underwriting require deeper dives into line-item data, contracts, and current procurement strategies.

• Most portfolio companies do not have the resources, expertise, or organizational alignment to tackle procurement opportunities on their own. Third parties and/or new procurement leaders are often required to accelerate speed to value and maximize the benefit.

• Over time, as procurement consistently delivers measurable, portable value, procurement should be instilled as a standard part of the value creation playbook.

In this Private Equity Executive Series perspective, we will outline steps to estimate potential Procurement Value Creation opportunities in your current portfolio and potential investments.

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