Bain acquires two businesses to build one powerful procurement offering
Bain acquires two businesses to build one powerful procurement offering
Today, companies are more concerned than ever about understanding their supplier networks and securing access to needed materials at the right quality and cost—especially amid disruption. As we continued to support our customers in this area, the Bain teams began searching for ways to bring even more of this expertise in-house.
Many teams unite to assess and give the “buy” signal
Acquisitions are complicated—it’s difficult to know from the outside how well-engineered a company’s products really are, and whether those businesses, folded into the larger organization, would thrive. Many Bain teams gathered to ensure we made the right decision.
Many teams unite to assess and give the “buy” signal
Acquisitions are complicated—it’s difficult to know from the outside how well-engineered a company’s products really are, and whether those businesses, folded into the larger organization, would thrive. Many Bain teams gathered to ensure we made the right decision.
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Bain Marketing
The Marketing team crafted the messages for both internal and external audiences, generating excitement and commercial momentum.
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Finance
The Finance team played a critical role in due diligence, in planning for the integration, and in helping to execute it. They assessed the tax risks, determined the optimal structure for both parties, secured the financing, and more.
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General Consulting
Three Bain case teams conducted commercial due diligence, built a business plan and operating model, and helped develop and implement a plan to create additional value after the deals closed.
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Global & Local Operations
The Mergers & Acquisitions (M&A) team led the process to execute the deal. They interfaced with company management, helped structure the deal, led negotiations, advised on due diligence, and also coordinated between internal teams and external advisors.
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Legal/Risk
The Legal team partnered with outside counsel to conduct legal diligence and assess the deal's key risks. They worked with the commercial teams to translate the desired structure into legal documentation and helped review and negotiate the letter of intent and purchase agreement.
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Product, Practice, and Knowledge (PPK)
The PPK team cultivated relationships with management at both companies and developed a joint vision for the combined entity. They supported due diligence, helped develop the investment thesis and business plan, and collaborated extensively.
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Talent Management
The talent team played an important role in analyzing the existing team and talent policies, assessing the compatibility and strengths of both companies’ existing cultures, and making a plan for how to ensure we retained those unique strengths while also welcoming the teams into Bain’s culture.
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Technology Solutions Group (TSG)
TSG assessed both firms’ technology to identify risks and find a tech model that would allow both companies to work together while also securing their data.
Background
How does a large, multinational consumer goods company with thousands of vendors who each have their own vendors know its supply chain is 100% free of exploitation? How does a big food producer reliant on grains adapt when Russia’s invasion of Ukraine cuts off most of the world’s wheat? How can companies model, understand, and plan for all situations, and know each department is purchasing quality goods? These questions tend to vex leaders across industries and many of them hire Bain to help figure it out.
Over the past few years, Bain’s Procurement practice has accomplished this by supplementing their expertise by bringing in supply chain and procurement technology partners. These companies not only help Bain’s clients adapt, but preempt and lead their industry by incorporating commitments like diversity, equity, and inclusion (DEI), and net-zero carbon emissions.
As demand for Bain’s Procurement practice’s work grew, they engaged Bain’s M&A team and others to explore building out an even more complete offering.
The plan
The Bain team began by exploring all relevant companies in the market, including many the Procurement practice had interacted with over the previous decade. Two stood out.
ArcBlue was a Melbourne-based software that helped companies make sense of, track, monitor, and direct transformation initiatives. For big companies, it’s difficult to initiate a sweeping change and then keep track of whether it’s really going according to plan. ArcBlue helps.
Proxima was a Kent, United Kingdom-based procurement software company with supply chain consulting expertise that helped companies reduce costs and increase the quality of materials they’d purchased.
The Procurement and M&A teams were curious, could these two capabilities on the opposite ends of the earth be folded into the Procurement practice?
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Were the target companies open to a conversation?
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What were their business models, and could they scale?
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What were their technology stacks, and could those be integrated?
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What was distinct and good about each culture?
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What were the financials of both businesses?
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If a deal were proposed, what were the tax implications?
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How would Bain finance the deals?
The approach
Bain’s teams approached both companies to evaluate the mutual benefits of combining them. Bain's Product, Practice & Knowledge (PPK) team helped define a joint vision and actually ran multiple pilot projects, where the two companies partnered to deliver client work. Meanwhile, the Mergers & Acquisitions (M&A) team started to develop and test different options for how to structure the deal.
As excitement on both sides grew, all parties agreed on a letter of intent and Bain launched its diligence work to study the potential. Bain’s consulting teams, in partnership with PPK and M&A, improved the investment thesis and built a plan to help the combined entity reach its full potential. The Finance team examined their historical performance, assessed the tax implications, and explored financing options.
Bain’s Talent team met with both companies to understand the core of each culture. TSG, Bain’s technology experts, explored both companies’ technology stacks and software offerings to understand the complexities, risks, and best approach for collaboration post-close. The Legal/Risk team led a thorough legal and risk diligence process, and then led the process of drafting and coordinating negotiations on the purchase agreement with input from the M&A and commercial teams.
In the end, all teams provided critical input that convinced Bain’s board and investment committee to move forward. Both acquisition targets came with strong client and financial track records, highly talented teams, and compatible cultures that would fit well with Bain. With these added capabilities and expertise, Bain could help even more companies build adaptive and resilient supply chains, ensure the quality and cost of materials, and embed their DEI and sustainability efforts into all they do.
The results
The Bain teams executed the ArcBlue transaction in February and the Proxima transaction in May. Throughout pre-deal diligence and post-deal planning and integration, hundreds of Bainies were involved in forging links throughout the companies.
new employees; doubled pool of supply chain and procurement experts
procurement projects delivered
average purchase cost reduction for Bain’s clients
It takes a global village
Teams around the world partnered to make these acquisitions a success.
미주
유럽, 중동, 아프리카
It takes a global village
Teams around the world partnered to make these acquisitions a success.
