Client Result | Rugs USA
Collaborating at every step to execute a merger integration ahead of schedule and under budget
Platforms
Services
Rugs USA was embarking on its largest transaction to date and needed help quantifying the increase in EBITDA and defining an actionable plan to get there. The result? A focus on creating financial value that drove synergies by 60% over diligence targets.
Facing their largest acquisition yet, Rugs USA turned to West Monroe to accelerate value creation, aiming to consolidate operations while driving profitability. Building on existing synergy insights, our team drilled down on data from both Rugs USA and Annie Selke, uncovering new opportunities across supply chain and technology functions. This analysis formed the basis of a detailed integration roadmap. With clear synergy targets and functional teams in place, we unlocked a path that delivered a 60% increase in EBITDA synergies from diligence estimates, ensuring this strategic acquisition would reach its full potential.
In just seven months, West Monroe and Rugs USA executed a fast-paced integration, leveraging Intellio® Deliver to guide nine targeted workstreams. We mobilized an Integration Management Office (IMO), setting up operational and cost-saving structures. Our team established a new organizational structure, consolidating distribution centers to reduce freight expenses by 70% and applying a revamped sourcing strategy that achieved 114% savings. This shift improved customer experience through faster delivery times while lowering costs, aligning with Rugs USA’s vision for long-term operational efficiency and future growth.
Our focus on value creation paid off, with Rugs USA seeing a 60% increase in EBITDA synergies over initial estimates. The integration improvements also resulted in a 10x return on investment, largely driven by operational and sourcing efficiencies. Completing the project two months ahead of schedule and 30% under budget further solidified the success of the merger. Beyond immediate financial gains, the project set a foundation for long-term growth and a scalable blueprint for future acquisitions.
Rugs USA, a leading rug retailer, acquired Annie Selke to advance their “house of brands” strategy. With successful leadership in hundreds of M&A transactions, West Monroe accepted the challenge for a smarter, faster integration, bringing expertise in both technology and the consumer products industry. Our team identified synergies quickly, focusing on consolidating distribution centers and retooling their tech stack to deliver better customer experiences. West Monroe’s collaborative approach helped Rugs USA not only exceed its original synergy estimates by 60% but also create a model for future integrations. This project came in two months early, under budget, and with a 10x return on investment.
additional cost reduction through freight vendor consolidation
additional cost reduction through a revised sourcing strategy
additional cost reduction by consolidating operations
