Bolt-On Acquisition and Consolidation Synergy Delivers $26.8M of EBITDA Savings

The Challenge

A $1B private equity owned automotive aftermarket re-manufacturer was seeking to acquire a $140M bolt-on.  The private equity firm retained TriVista to perform a pre-LOI Quality of Operations® Due Diligence:

• Conducted a high-level overview of Sales Inventory Operations Planning (SIOP), sourcing and procurement, manufacturing operations, and quality systems
• Created a preliminary synergy analysis and developed a high-level footprint and operations consolidation plan
• Conducted financial assessment, estimated capital investments, one-time restructuring costs and savings
• Established project deliverables and timing
• Two business units were included in the deal, and analysis was completed for each unit

Our Approach

• Performed functional assessments at five facilities to analyze capacity
• Conducted detailed interviews with key staff members to assess leadership effectiveness
• Performed in-depth data analysis
• Reviewed the SIOP, sourcing and procurement processes
• Conducted a detailed current and future state inventory model with excess inventory burn off analysis
• Executed operational benchmark of target sites against a database of 85+ similar manufacturers
• Developed detailed cost savings/benefits analysis and reviewed with company management to validate and gain buy-in
• Developed high-level consolidation timeline

The Results

• Identified EBITDA savings of $26.8M
• Developed high-level consolidation plans for the two business units. The first consolidation plan identified $19.5M of EBITDA synergies with a total consolidation expense of $14.7M. The second consolidation plan identified an additional $7.3M of EBITDA synergies with an expense of $3.8M