Global Health Insurance Company (Merger & Acquisition: Sourcing & Procurement (Clean Room)
A global healthcare insurance company acquired its rival in a $16 billion transaction. Prior to closing the deal, during the review of the transaction by the FTC, the client wanted to perform additional due diligence and determined that synergies and savings from procurement could be realized once the transaction was approved.
Approach & Recommendation
We used a “Clean Room” approach for the sourcing and procurement function, where we (the intermediary) could review each company’s data with the assurances that each of the companies’ data would not be shared with the other party.
We worked with both companies to retrieve all relevant procurement data and existing contracts. We built a Spend Cube of $1.5 billion for the merged entity and completed the spend analysis. We also identified $35 million in annual run rate savings and recommended opportunities for strategic sourcing initiatives. In addition, we also created a business case model to support savings, and developed roadmap/recommendations for Phase 2 post-merger implementation.
Global Health Insurance Company
Strategy & Operations