Franke Group

How we helped

• Mergers & Acquisitions
• Creditor Advisory Services
• Turnaround & Restructuring
• Consumer Products

AlixPartners was engaged in April 2021 by Equistone Partners Europe – the private equity investors and new owners of the proposed standalone KWC Group – to plan and successfully implement the carve-out of Franke Water Systems from the parent company.

Post-close in May 2021, AlixPartners was retained to lead SAP implementation, develop a Target Operating Model strategy for the new group, and later support restructuring efforts during 2022, in response to macroeconomic market disruption.

In 2022 AlixPartners was ranked the number one management consultancy in Switzerland for implementation, reorganization and restructuring consulting, according to the most recent “Consultant Ranking” survey conducted by Prof. Dietmar Fink (Bonn-Rhein-Sieg University of Applied Sciences) and Bianka Knoblach by the Scientific Society for Management and Consulting (WGMB).

The Situation

Franke Water Systems had been part of the global Franke Corporation since 2013. Following engagement from Equistone in April 2021, the team faced a complex challenge in effectively extracting the divested business unit from the parent company. This included navigating a complicated IT environment, organizational design for the standalone group, and reallocation of a geographically diverse suite of manufacturing infrastructure assets.

With less than two months between the signing and closing of the transaction, the AlixPartners team needed to rapidly remove the new KWC Group’s heavy reliance on services provided by its former owner. It was critical to scale up standalone resources and competencies, realign a heavily fragmented ERP landscape, and ultimately position the new company for a seamless continuation of operations post-close, on a path for future growth.

The Approach

A dedicated team of carve-out and separation experts accelerated progress ahead of close, streamlining the organization and operationalizing the new legal entities.

The new KWC Group faced a challenging target to exit Transitional Service Agreements (TSAs) within 6-12 months after closing, particularly given no internal IT function had been inherited from the parent company. A rapid, greenfield IT carve-out approach reset and rebuilt the IT function, applying “lean” principles to the concurrent design of a future Target Operating Model (TOM), while also identifying vital knowledge transfer to be completed and key resource gaps to be filled.

In addition, the TOM encompassed a detailed review of the group’s operational footprint, also assessing the existing supplier base and manufacturing S&OP processes to measure improvement potential in line with ambitious growth targets.

A new business reporting logic was quickly developed to align with ownership expectations – mindful of upcoming SAP implementation – also increasing transparency on financial performance and target setting for business units and individual functions.

The Solution

Drawing on the deep expertise from multiple geographies across the firm in operational, organizational, digital, and restructuring disciplines, AlixPartners helped KWC Group quickly and smoothly transition to its new operational leadership structure post-close. This included the consolidation of the legal entity structure to support the streamlining of the organization.

Our team’s strategy and implementation knowhow in a range of “When It Really Matters” situations contributed to the identification and implementation of performance improvement measures carrying c. CHF15m EBITDA impact, plus additional cash impact during 2022.

Change agents within the business have been empowered to drive further sustainable transformation towards the Target Operating Model. The AlixPartners team instilled a deep mindset shift throughout the business, which has seen it successfully emerge from a highly complex parent company ownership structure to its new standalone status, set for further value creation and future growth as a continued market leader active in 60 markets worldwide.