Consolidation and merger & acquisition activity in the Retail & Consumer industry

In the current business environment, R&C companies are under increasing pressure to achieve greater profitability and efficiencies. Consolidation is a two-way street since the concentration of sales among fewer players makes it difficult for small and medium sized companies to profit since the large CPG manufacturers and retailers have greater financial strength and can often thwart competition leading to lower price wars.

Further, near-term consolidation is anticipated in R&C since total US businesses, post the economic crisis, have been conserving cash and now sit on $1.9 Trillion in cash (9/30/11). R&C can expect its fair share of M&A activity from this cash trove. We also anticipate that merger & acquisition activity in R&C will continue to be dominated by buyout or private entity firms and transactions in emerging markets as US companies pursue globalization.

As the global economy starts to grow, distressed company sales will continue, but at a lesser rate than in the past year. Potential buyers will be large companies investing in emerging markets, especially mass merchants who will target retailers with low valuations and financing problems and private equity firms that will attempt to sell properties that have appreciated significantly since the low valuations that immediately followed the start of the economic crisis.

How we help clients

Our multi-disciplinary team of practitioners creates value for clients by delivering proven processes and subject matter expertise to achieve tactical integration, separation, and due diligence in mergers, acquisitions, divestitures, and other large-scale corporate change.

We help clients achieve rapid integration to realize desired synergies and allow them to return to "business as usual" as quickly as possible. Through our M&A integration process, we provide field proven frameworks, tools, templates and functional expertise to help focus acquirers on capturing early and sustainable deal value.

We help clients redirect capital and management focus on core operations by spinning off or divesting non-core businesses to capture maximum proceeds and to strengthen the reputation and competitive advantages of the operations that remain. We establish an overarching divestiture program across the organization, applying field proven frameworks, tools, templates and functional expertise to perform rigorous planning, identify gaps in expertise, and manage cross-functional dependencies, thereby reducing risk and mitigating value erosion.

We help clients review and assess target company operations and IT infrastructure and applications to identify under-investment, over-spending, and mismatches between operations/IT plans and overall business goals. Our due diligence efforts often surface issues that buyers will consider in making a go or no-go decision on the acquisition, or identify areas to address during the integration process.

We help clients accelerate the reorganization process and increase shareholder value through and enterprise wide program that helps companies identify, prioritize, and implement value driving initiatives. We develop a blueprint and tactically implement functional reorganization initiatives to rationalize and align people, policies, processes and systems.

How clients benefit from our work

• Accelerated speed to market
• Enhanced objectivity and quality of information provided
• Potential "value leaks" identified early and proactively addressed
• Free management to focus on critical tasks of "keeping the lights on"
• Enhanced transaction value
• Execution of a speedy, problem-free integration
• Smooth transaction closing and post-close transition
• Early realization of synergies
• Tactical implementation across functions