Service Area: Operations – Procurement & Sourcing
Client Type: Private Equity Firm
Service Provider Type: Operations & Supply Chain Consulting Firm
Industry: Construction & Engineering
The client was excited about a new investment and wanted to talk with BluWave to think through some value creation plans. BluWave recommended a procurement project based off our prior experience in the resin space, and quickly connected the client with a firm focused on reducing spend. The engagement led to a multi-million-dollar windfall of enterprise value creation within the first year of the PE firm’s hold period.
-Scott Bellinger, BluWave Co-Head of Research & Operations
A manufacturing-focused private equity firm was initially evaluating an acquisition target in the plastics production sector. The PE firm contacted BluWave for help identifying a service provider with the right experience not only to evaluate for cost improvement opportunity, but also to capture that opportunity if they were successful with their bid.
The PE firm was adamant about working with a service provider that intimately understood the respective resins involved and the plastic production process.
Within 24 hours of the initial scoping call, BluWave’s research & operations team presented the PE firm with a short list of pre-vetted, third-party experts who were experienced with optimizing procurement spend for resin and color concentrates.
The PE firm selected the best fit for the project and, with the aid of the opportunity the service provider identified during due diligence, they were successful in winning the bid. They then engaged the service provider immediately after close to lead a strategic procurement project to capture the identified opportunities.
The service provider led successful strategic procurement projects across both resins and color concentrates that yielded nearly $15 million of cost savings with both projects fully implemented within 12 months of the acquisition. The specialized resource negotiated new three-year agreements with suppliers while also implementing new pricing mechanisms that allowed for better on-going price management.
Overall, the PE firm saved more than 14% on about $100 million in spend.
The resin market and associated buying environment is one of the least transparent categories of spend that buyers in resin-based product manufacturers have to navigate. We’re very confident in our team’s ability to help our clients better understand their resin purchase options, where improvement opportunities exist, and how to help them capture optimal pricing and supply for their given situations.
-Service Provider Partner and Managing Director
