Route to market: leveraging your commercial capabilities to maximize transaction success EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in buildin g a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. EY Parthenon is a brand under which Ernst & Young LLP as well as other EY member firms across the globe provide strategy consulting services. © 2018 Ernst & Young LLP. All Rights Reserved. 1802-2579675 EYG no. 01919-183GBL This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com Contact information Omar Troncoso Campuzano Managing Director EY-Parthenon Ernst & Young LLP [email protected] Jeff Wray Managing Director Head of Consumer Products & Retail Sector EY-Parthenon Ernst & Young LLP [email protected] For consumer products and retail (CPR) executives, merger and acquisition (M&A) is more important than ever to growth and survival. Learn more about EY-Parthenon’s Consumer Products & Retail team at parthenon.ey.com. EY-Parthenon can help you navigate your options and answer the key questions surrounding a new route to market. In order to maximize the value of a transaction, a company must determine the optimal combination of the different route to market (RTM) structures that are being combined. Evaluate the commercial and operational capabilities of the intended target and compare them to the opportunities, gaps and priorities in your own business intend to actively pursue acqusitions over the next 12 months see the CPR M&A market as improving or stable Source: EY Capital Confidence Barometer 2017 Implement Evaluate Design Assess 4 1 2 3 RTM approach Assess the strategic options against a clear set of commercial, financial and risk parameters Design your future route to market operating model by determining key processes, systems and third-party relationships Implement focused governance and plans for cutover, stabilization and synergy attainment 55% 36% 97% expect growth to come from M&A, joint ventures and alliances Sales structure and capabilities Key accounts What levers drive revenue and cost synergies with the existing portfolio? How can we limit redundancies while expanding potential access to new markets for the combined entity? How do we evaluate the combined product portfolio’s distribution network needs? How can we incorporate these findings into the valuation model? What is the current RTM adopted by each of the companies across product categories and channels? How do we rationalize the legacy RTM models and identify leading practices moving forward? What are the contractual risks and liabilities that will be faced as RTM strategies are aligned? What will be the cost impact of RTM changes to various functional support organizations and structures? Key route to market questions Channels