Carve and Integration of a $180Mn Automotive Exterior Trims Manufacturer
Carve and integration of a two manufacturing plants, at an estimated IT One-Time Costs of $9.6Mn(1), which is 5.3% of the Company’s revenue. PIP delivered the project in 9 months, resulting in early exit of 28 IT TSAs, and circa $1Mn in cost avoidance. Additionally, PIP enabled circa $750k in Op Ex/Run Rate savings through license true-up, negotiations, and rationalization of redundant systems.
Background
- $180 Mn in Revenue, 2 Manufacturing Plants, Carve-out from Public Company, Integrate with Buyer’s $1.4Bn PortCo, 450+ employees, 4 Satellite Sales Offices, $9.6 Mn IT Carveout Budget (5.3% of revenue)
- The key challenges preventing the company from achieving transaction value, and operations efficiency goals included:
- Seller’s strict Cybersecurity policies, including no-trust and connectivity
- Lift-Shift-Integration of SAP With PLEX System
- Highly entangled SAP, MES, QC, and HR systems
- High volume of local applications with limited or no documentation
Approach
- Pre-Deal diligence to assess entanglements, carve complexity, ROM Costs, transaction risks and synergy – 6-weeks, $65k Project
- Carveout Strategy & Planning – 12-weeks, $480k project
- Developed and best-fit Carve – Integration approach, roadmap, work plans, milestones, dependencies, resource and cost estimates
- Prepared TSA schedules, identified scope, duration and costs
- Developed the approach and plan to carve SAP ERP system and integrate with PLEX ERP system
- Separation Management and Cross-functional coordination – 9 months, $650k project
- Execution support in the areas of data migration, non-ERP applications, IT infrastructure, IT Security & Cybersecurity – 9 months, $880k project
Results
- 28 IT TSAs exited in 9 months, circa $1Mn in TSA cost avoidance
- Remediated legacy Cybersecurity and IT security risks and gaps
- PIP delivered the project at circa 800k under the one-time cost budget estimated at diligence
- $300k in savings from true-up/negotiation of SAP and Microsoft licenses
- $450k in cost avoidance by rationalizing local applications footprint
- $80 of additional services offered at no cost to the client (for cross-functional coordination, PLM integration, and Change Management)
