Success Story - "Purchasing Consolidation"
Leading private equity investment firm with over $8B in assets under management, currently invested in a portfolio of over 40 companies.
Company Situation and Problem
Portfolio companies did not communicate or cooperate on any level, including procurement, while buying many common goods and services, thus paying higher prices individually than they might on a consolidated basis.
Paladin Actions & Recommendations
Paladin and Client secured cooperation between 25 portfolio companies, then gathered spend data from each company, determined the business needs of each individual business, identified and consolidated the purchase volume of common spend categories and commodities, negotiated leveraged deals that would survive future divestitures or acquisitions, and helped implement the new contracts
- Paladin secured savings in 20 spend categories totaling over $15 Million, or approximately 20% of the companies’ total spend.
- Many of the companies enjoyed the cost reductions.
- Moreover, using a valuation ratio of 10 to 1, the Private Equity firm realized an improvement in market valuation of $150 Million.