A management consulting firm engaged Virtas Partners to assist with due diligence and integration of a carve-out acquisition of a software IT consulting firm.
Client Need
Our client, a management consulting firm, was in the process of evaluating a carve-out acquisition of a business that serves certain industries via software solutions and IT consulting. With exclusivity obtained, the client came to us to walk through the due diligence process while preparing for the deal close. We then needed to develop an integration strategy and execution plan. The initial integration thesis included bringing current revenue in house, exploring potential cross selling with Target products, and realizing select cost synergy opportunities. Post close, our client needed additional support to execute the integration strategy.
Tailored Solutions
- Established detailed in-scope perimeter, classifying cost centers and employee categories and reconciling to reported results and internal management metrics
- Recast existing financial forecast into a cost baseline by function including elimination of allocated costs
- Analyzed details of selected departments, spend categories, and vendors
- Gathered company specific insights of labor efficiency, spans and layers, and internal organizational benchmarks
- Leveraged targeted 3rd party benchmarks, tailored to the client’s industry segment, geographies and revenue, to confirm areas of cost inefficiency
- Sized opportunities totaling 2% to 4% of cost baseline in Information Technology, Finance, Human Resources, Executive Leadership, & Legal
- Identified processes within Finance, Information Technology, Human Resources, & Customer Service requiring redesign & transformation to enable future cost takeout
Value to client
- Developed joint integration roadmap, summarizing high-level priorities, milestones, and timelines prior to deal close
- Assessed current state organizations, processes and systems, and designed interim and future state operating models
- Conducted working sessions with select functional teams to confirm business requirements for key business processes
- Established executive updates to discuss integration progress, achievements, and risks with suggested mitigation strategies and key next steps
Capabilities
- Deep merger integration experience with several integration projects performed in the business services industry
- Pragmatic ‘lite’ integration playbook specifically designed to support mid-market transactions
- Small, tenured team to partner with you, translating to less strain on your team