Why savings don't stick after acquisitions

01$27.5m out, $3.7m moved

Bapcor, the trade and retail auto parts group, ran a serious cost program in FY25. It delivered $27.5m of savings, at the upper end of its guidance range. It exited or relocated 70 sites, including 23 smaller warehouses.

Its total cost of doing business fell by $3.7m.

Twelve months later, in FY26, cost of doing business was $719.6m, up from $669.1m, and underlying net profit after tax was down 85%. Part of that rise is continued investment in technology and supply chain, and higher fuel and freight costs. Bapcor's own results presentation also names something else in the way: "Complexity of processes and systems make it difficult for team and customers to connect and transact seamlessly."

Bapcor grew largely by acquisition, and it isn't alone. Any business built that way carries the same risk.

02What a run of acquisitions leaves behind

Every deal brings its own systems, product range, pricing, processes, warehouses and legal entities. Integration then has a long list and a short runway.

The early work is visible and gets done: close the deal, combine the P&L, rebrand, and capture the headline synergies in sites and head office roles. The harder work is getting to one system, one process and one range. It is slow, it touches customers, and the synergy case has usually been banked by the time it comes up. So it gets deferred to the next financial year, and then the one after.

A few deals later, the business runs several ways of doing the same thing. Each one needs people, licences, reconciliations and support. When a cost-out program eventually arrives to fix the number, it closes sites and takes out roles. The duplicated systems and processes stay, and the cost grows back around them.

03The tax every deal adds

Every acquisition that is integrated on paper and not in operations adds to the complexity tax, in four places.

Most synergy cases count the sites and the head office roles. Very few count these four.

04Integration finishes at switch-off

Taking something out of the business happens in three steps. Stop selling it, move the customers and data off it, then switch it off. The savings sit almost entirely in the third step, and many integrations finish at the first.

An integration plan that will hold its savings has four features:

1. 1.A count on day one. Systems, products, price lists, entities and processes, for each business, before anything changes.
2. 2.A switch-off date and owner for each duplicate. Decommissioning is scheduled work with a budget, rather than a hope for later.
3. 3.The tax in the synergy case. Run cost, cost to serve and change cost are measured before the deal and tracked after it.
4. 4.A finish line defined by the count. Integration is complete when the count reaches its target, regardless of when the logos changed.

Our team has led this work from the other side of the deal too. A leading Australian wealth manager separated from its former parent, one of the country's largest banks, in a $430M transformation under private equity ownership: 36 TSAs exited and an $18B account migration, with no major customer disruption. Separation and integration run on the same discipline: every shared system, contract and service has an exit date and an owner.

05Five questions about your last deal

1. 1.How many systems, products and entities did it bring in, and how many have been switched off?
2. 2.Is there still a reconciliation between the acquired business's numbers and yours?
3. 3.How many price lists and product variants did it add, and does each one earn its keep?
4. 4.What did your last three projects cost against plan, and how much of the overrun came from touching inherited systems?
5. 5.If you sold the combined business tomorrow, what would a buyer find in week one?

If the answers are uncomfortable, the integration has a second phase still to run. It is cheaper to run it now than to have the next buyer price it in.