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Expert buying can save big money after a buyout

Focusing on cutting the cost of goods and services can save large amounts of money very quickly when a business has been taken over, procurement expert Robin Jackson told a conference on buyouts.

Robin Jackson, CEO of procurement consultants ADR International, told the Buying into Buyouts conference in London that a review of spending on third-party suppliers should be split into “quick wins” and longer-term strategy.

ADR International was the main sponsor of the event, attended by 150 delegates from the venture capital, private equity, banking and legal industries.

Jackson said an opportunity analysis should be carried out immediately after a buyout to find savings, then a longer-term strategy should be identified. This should include examining the company’s capabilities, building best procurement practice and involving key internal stakeholders in the procurement strategy.

Jackson gave the conference an example of quick savings: ADR International had saved 20 per cent on the cost of a £1.7 million cleaning contract within the first 100 days of a takeover.

He told the conference, organised by finance magazine Real Deals: “Procurement is an area where big savings can usually be found very quickly. In a buy-out, this can be a fast route to improving the bottom line.

“After the quick wins have been made, a longer-term strategy should be identified to make sure the supply base is protected and that sustainable efficiencies have been built in for the future"