Cost Reduction for Portfolio Companies

Alliance Cost Containment (ACC) partners with middle-market Private Equity firms and their portfolio companies to improve EBITDA and reduce indirect procurement costs. We reduce costs across PE portfolios through procurement optimization. To date, we have performed more than 3000 category audits and saved millions of dollars for PE sponsored investments.

Benchmarking & Tracking

Our ability to benchmark and document savings is just one thing that sets us apart from GPOs and others in the private equity expense reduction space. Working efficiently with our U.S. based team, portfolio companies achieve a reduction in their non-core procurement expenses with minimal disruption to company operations. Our vendor agnostic team reviews current purchasing activity at the line item level before negotiating with current and new suppliers to achieve the lowest market rates, typically delivering savings of 7%–35% per category reviewed. Once savings are established, we assist with implementation across the expense areas to ensure the updated pricing is realized. After implementation, most categories are monitored with a detailed audit process which compares original pricing with the new, lower pricing.

Typical Client Profile

ACC works with companies from all different verticals. Most portfolio companies have revenues of $100M or higher with a non-core procurement budget of $5 million to $100M+ annually. PE sponsors and portfolio companies who work with ACC to reduce expenses can expect to see a savings ranging of $.5 – $20M+ per company. We are often connected to these companies through middle market private equity firm relationships.

Private Equity Group Purchasing Cost Reduction

Could your portfolio benefit from an expense reduction strategy? Send us a note for a custom complimentary savings roadmap.

Lower non-core expenses for PE portfolios across 35+ procurement areas

Increases overall portfolio valuations

 EBITDA improvements through savings and efficiencies

Improves procurement processes
and best practices

Performance based model. No savings, no fees (and no risk)

What Sets Us Apart

  • In-depth market knowledge for each savings category
  • National purchasing agreements with top suppliers
  • Procurement data collection at line-item level
  • Subject Matter Experts devoted to each project level
  • Aggregates purchasing volume
  • Tailored, white-glove savings programs
  • Ongoing discovery of billing errors & purchasing non-compliance
  • Monthly audits for accuracy
  • Flexible, performance-based fee structure (no membership fee)
  • Meaningful valuation improvement

By looking beyond the numbers at vendor quality and supplier agreements, we achieve the lowest market pricing, value and quality. For our team it is about tracking — and realizing — meaningful savings while maintaining world-class products and services. 

Services for PE Firms and Portfolio Companies

Due Diligence Support

Preliminary Savings Analysis

  • High-confidence savings estimates for platform investments & add-ons
  • Identify supplier risks

Indirect Cost Reduction

Average of 7% – 35% Savings

  • Implement cost reduction in 30+ expense categories
  • Improve EBITDA & valuations

Ongoing Savings Audits

Verify + Track Ongoing Savings

  • Audits confirm bottom line impact
  • A value creator during exit phase
  • Monitors for errors & compliance

Performance Based Fee Model

During an ACC Private Equity Engagement, if there are no savings, there are no fees. 

Alliance Cost Containment has perfected the process of reducing indirect operating expenses. We work efficiently to expertly analyze data and manage a bidding process that reduces operating costs in a matter of weeks.

Enterprise Value Gain Per Portfolio Company Cost Reduction Project

(at 7x savings)

$
0
to
$
0

Group Savings for PE firms

Complimentary, custom savings analysis for each investment identifies savings opportunity.

Significant savings on 30+ non-core expense areas agreed upon in advance by each company.

Monthly audit reports validate the exact amount of implemented savings that flow to the bottom line.

Zero risk – performance-based fee structure with minimal disruption to your PE firm or company operations

Advice for Implementing Expense Reduction Across a PE Portfolio

Avoid misaligned vendor incentives

While some PE firms utilize Group Purchasing Organizations (GPOs) to generate value, many are paid commissions by vendors, which creates incentives for portfolios to pay higher prices over time.

When not properly disclosed and documented, these hidden GPO commissions lead to conflicts of interest and increased liabilities for PE firms. ACC is happy to conduct a confidential, risk-free audit of your current GPO provider to see if you are receiving full disclosure and optimal savings for the savings areas engaged.

Create Competitive Tension for Fair Market Pricing

Lack of competitive tension in the marketplace is an important pitfall for portfolio companies to avoid, and something we often encounter. Most companies have at least a handful of long-standing, protected vendor relationships. While there are merits to having close vendor ties, these relationships create a complacency that causes companies to miss out of significant savings as well as high-value offerings from non-incumbent suppliers.

ACC’s team ensures PE sponsored companies achieve the lowest prices with the best quality services.

Email Emmeline Wexer at ewexer@alliancecost.com or call ‭201-657-0043‬ for a complimentary savings analysis.

Send us a message

 

Contact us to learn more about a partnership with ACC.
Our team will be in touch with you shortly.

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The Private Equity Team at ACC is looking forward to hearing from you.

Emmeline Wexer
‭201-657-0043
ewexer@alliancecost.com


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*DISCLAIMER: Figures on this page and website are for example purposes only. Savings will vary based on the size of the firm and spend. Use of the Alliance Cost Containment website does not constitute a professional relationship. Neither ACC nor its affiliates makes any express or implied representation or warranty about, or shall be liable, in contract, including negligence or otherwise, for any direct, indirect, special or consequential loss, damages or reliance in connection with this site, its use, its content or any products or services referred to on this site.

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