Integrating an Acquisition

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The Softer Side of Post-Merger Integration: Maximizing Value in Pharmaceutical M&A Deals

Maximizing the value of an acquisition by focusing on the softer side of PMI
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“Companies are best positioned to maximize the value of an acquisition when they identify, plan for, and manage the human element of the PMI process.”
-- Acquis “The Softer Side of Post-Merger Integration (PMI): Maximizing Value in Pharmaceutical M&A Deals”
While it may seem obvious that a successful acquisition requires meticulous PMI planning, critical details are often overlooked in even the most carefully documented integration plans. PMI teams tend to focus on tangible, quantifiable components of the integration, such as corporate governance, financial strategy, and value creation strategy that can be easily documented, planned for, and communicated to shareholders. Other intangible components, such as people, culture, and customer relationship management, however, can get overlooked or not prioritized. According to a senior M&A executive at a Fortune 500 global pharmaceutical company, it is essential to engage with newly acquired employees as quickly as possible to identify potential issues and understand their priorities. It helps reduce frustrations and enables a more seamless integration. It is essential to recognize the importance of the less tangible, people-centric components of PMI because such issues can make or break the long-term success of a transaction. By addressing the human element with a comprehensive change management plan integrated into the overall PMI program, organizations can not only ensure long-term success, but also extract additional value from the deal.

Companies can best position themselves to maximize the value of an acquisition when they identify, plan for, and manage the softer side of the PMI process. By incorporating a change management program to address the human element, companies are more likely to be successful and avoid:
1) Missing key targets and operational goals
2) Losing key employees
3) Cultural misalignment
4) Losing key customers/HCPs.

To achieve this, Acquis recommends three key steps:
1. Include people (internal and external) and culture in early stages of PMI planning: Assign dedicated resources to address people and culture issues early in the pre-close planning process. By identifying and mapping cultural and organizational differences between merging companies early on, management can ensure that people issues are not overlooked later.

2. Map priorities and determine change management strategy: To determine key areas of focus, leaders must conduct deep assessment of both companies to identify and map organizational differences. By understanding the magnitude of the differences and the impact the merger will have on employees in the new organization, management can develop the most effective change management plans.

3. Integrate change management into every step of the PMI program:
World-class PMI teams are known to maintain open lines of communication throughout an entire deal cycle, whether to acknowledge uncertainty, provide concrete details, or simply give a timeframe for expected future communications.
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Acquisition Integration Specialists
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Life Sciences




Impact Story

Providing Divestiture Support

Related Impact Story

Establishing and Managing a Strategic PMO

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Client Profile
A leading pharmaceutical company
Life Sciences
After the decision to simultaneously spin-off two major divisions, a leading pharmaceutical company was experiencing overwhelming divestiture activities. The client needed help developing an approach that would meet aggressive timelines for Day 1 for both divestitures. They needed help creating a support model that could leverage resources across divestitures to meet budget requirements. They needed to manage the complex priorities of internal and external stakeholders, and negotiate TSA agreements with buyers.
Approach: Think + Do
To prioritize and manage the multitude of divestment activities, we scoped the project and proposed a mix of resources from multiple organizations with the right skill sets to handle the aggressive timeline and avoid risks where possible. We designed a waved approach to proactively segregate conveyed colleagues from those remaining with the parent company. Once the divestment strategy was complete, we focused on developing strong relationships with application teams across global markets to manage a coordinated set of activities. We designed and supported the Project Management Office to ensure aggressive timelines were met. We managed cross-functional teams from multiple organizations, and we managed vendor relationships when appropriate to ensure that vendor resources were also working towards the pre-defined milestones.
We helped successfully separate two divisions with over 5,000 employees in over 37 markets from the parent company within an eight-month timeline. We ensured all key milestones of the TSA for Day 1 readiness were met. The client experienced no operational problems during the divestiture process, which was successfully completed on time and on budget. The huge success of the project resulted in new sponsorship requests for our services from the divested company.
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