Retail & Consumer

$9M of cost savings identified for a merger in the hospitality product supplier market

Our client, a leading Private Equity fund in the United States, was looking to purchase and merge a supplier of tableware and glassware products into an existing portfolio company within the hospitality industry
As part of the due diligence process, MERU was engaged to identify cost synergies pertaining to logistics, warehousing and SG&A
Due diligence was conducted during the outbreak of the COVID-19 pandemic, resulting in the adjustment of the integration strategy and tools to enable the deal to proceed as planned and limit disruptions during the integration phase

Define the value levers of each company to understand the day-to-day drivers of value
Evaluate operational functions of both companies to identify best practices pertaining to the value drivers
Analyze each warehouse and quantify opportunities to increase layout and capacity utilization

Analyze inbound and outbound shipping routes, suppliers, and processes
Analyze sales data to identify redundant resources and business functions whilst maintaining service levels
Assess operational and integration risks

Identified $9.0M of cost savings from the proposed merger in three-week timeframe.

50% - 70% increase in capacity at primary warehouse to enable 2-3 other warehouses to close down.

Development of a national logistics and warehousing strategy to improve customer service levels (e.g. reduced lead times) and reduce costs.