Performance-improvement diligence quantifies $50 million EBITDA benefit, paving the way to successful exit

The Challenge 

Our client, a leading distributor of lubricant, fuel, and diesel exhaust fluid for industrial and commercial businesses, wanted to make sure potential buyers could see their capacity to improve profitability. They had more than 10 key performance improvement initiatives in motion, including reducing fleet size and consolidating facilities. They knew quantifying the impact of these initiatives on financial statements was a priority to maximize deal value—but it proved to be challenging.

An Undeniably Different Approach 

We know that data and insight instill confidence, so our team came ready with a data-driven approach—the same type of approach we use to help consumer and industrial products companies unlock value by moving from traditional to digital operating models. Our team of industry and M&A experts leveraged West Monroe’s advanced analytical capabilities and tools—such as Alteryx — to analyze current improvement initiatives in detail, using transactional and operational data to calculate the impact and translate it into tangible estimates of future financial value: 

• We interviewed stakeholders to identify the origin of each performance improvement initiative and to understand its progress and the approach for calculating estimated value.   
• We leveraged West Monroe’s maturity framework—developed by our industry and M&A experts—to assess the integrity and likelihood of success for each initiative.   
• For each initiative that passed the maturity test, we quantified improvement capacity by conducting a bottom-up analysis that linked general ledger financials to customers, products, and value creation opportunities. For example, we leveraged Alteryx’s geospatial capabilities to identify route and customer overlap from previous acquisitions to determine route and drop consolidation; analysis drove recommendation to reduce fleet size by more than 15%.
• Then we prioritized the initiatives based on their ability to deliver value, the time required to realize that value, and resource availability.  

We then equipped the client’s management team with tactical guidance for delivering the promised value. We produced a roadmap and project charters, recommended a governance structure to oversee change, helped the company set up a value management office, and provided tracking tools and templates to measure success and incorporate it into financial forecasts. 

Real Results 

In just two months, the client received the insight it needed to show potential investors that it has a tangible performance improvement opportunity: $50 million in EBITDA, using our recommendations around margin maintenance, footprint optimization, and commercial effectiveness. Our approach was instrumental in establishing the company’s value-creation potential.  

The client’s management team is also now better equipped than before to deliver the performance improvement potential that was factored into the future forecasted EBITDA plans. Our work left executives with a plan for prioritizing limited tools, capabilities, and limited resources to manage change.