When buying or selling a company, it is critical to realising full value that the savings’ potential within the procurement spend is understood.
When buying a company, understanding the potential future EBIT realisation as a result of procurement activity allows you to model future profitability increases realistically. Likewise, evaluating the promises for procurement benefit from the selling party is important to make sure you are not over-pricing the potential. Given the multiples on EBIT that transactions deliver, getting this right can fundamentally determine whether a transaction will be successful and seliver the expected returns.
Likewise, when selling a business, you need to understand the EBIT potential available in your spend and the timescales to realise it. This enables you to either conduct the big wins pre-transaction to get the value yourself, or build them into your EBIT projections going forward.
Vendigital has a quick but effective process and unique software tool for accurately determining the potential. Our ability to “size the prize” and then potentially help deliver it comes from many years of experience in delivering pre and post transaction procurement spend reductions. We can also review your other group companies to accurately identify any group synergy potential, beyond the local savings.
We work with many Private Equity and VC houses in delivering dramatic EBIT improvements that can then be enjoyed at the exit. Being part of the 100 day plan ensures a hard-hitting start to the new business ownership that gets some rapid profit improvement delivered early.
"As a "Not for profit" organisation, we must ensure our costs are managed as tightly as possible so the maximum funds are spent on our research into fighting cancer. We are delighted with these results."
Belinda Turner
Procurement Director
Cancer Research UK
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