US 503B sterile outsourcing company seeks add-on acquisition

Our client was a US 503B sterile outsourcing company based in the Midwest seeking an add-on acquisition to expand manufacturing capacity and gain geographic advantages. The target was a global healthcare company seeking to divest from the 503B sterile outsourcing market.

IT & Cyber Diligence

After reviewing the target’s responses to our diligence requests and interviewing their operations and IT teams, it was clear that existing applications, infrastructure, and services would remain with the target’s parent company post-close. This meant that our client would have to immediately begin an integration project and would need a strong and clear TSA to give them the time and support needed from the target’s parent company.

We provided three deliverables:

• A comprehensive IT Due Diligence report

• An integration estimate that included opex changes and capex requirements with timelines

• Detailed TSA recommendations to inform our client’s legal team

On an update call with our client’s deal team, we noticed inaccurate assumptions in the post-close commercial plan to immediately ship to customers. There were no shipping capabilities in the target’s ERP as they only delivered to local hospitals via courier. We provided an estimate for how long it would take to setup a shipping carrier, purchase shipping stations and materials, and for the target’s parent company to add shipping capability to their ERP for our client’s temporary use post-close. This postponement of profitability changed our client’s financial model, allowing them to negotiate a more favorable purchase price.

Leading US pharmaceuticals supplier acquires genetic biomarker testing laboratory

Our client was a pharmaceuticals supplier seeking acquisition of complementary businesses. The target was a small genetic testing laboratory that would become a sales channel for our client’s personalized medicine business.

IT & Cyber Diligence

The target only had ten employees and no internal IT staff. Given that our client could quickly mitigate security issues post-acquisition by replacing devices and migrating the target to their own IT services, we scaled our questionnaire down and focused on processes. This led us to an important discovery that wasn’t captured by others on the deal team: Their value proposition was largely based on a custom web application that builds treatment recommendations after genetic testing. This intellectual property was not legally owned by the target, so they were required to get a letter from the developer transferring ownership prior to deal close.

Digital Transformation

Post-acquisition, we secured the environment by replacing all devices and migrating to the parent’s IT services such as Microsoft 365 E5 and related security capabilities. We also ensured that our relationship with the developer of the custom web application remained strong to support changes and future integrations. Finally, we implemented our client’s ITSM and helpdesk processes to provide support and service levels they could not have afforded previously.

Second and third largest US suppliers of pharmaceutical raw materials and equipment merge

Our client was a US pharmaceuticals supplier seeking expanded market share through acquisition.

IT & Cyber Diligence

In our comprehensive report, we identified issues such as a lack of standard security controls and the risk of operating the business on a 90% customized ERP system maintained by a single internal developer. But we also discovered that within 12 months the combined companies could realize nearly $1.4M in annual IT budget savings due to application and service synergies. This potential savings far outweighed the estimated cost of remediating issues.

Digital Transformation

After the deal closed, the client engaged us to lead the first 100 days of integration activities including:

• Performed detailed systems inventory and secured admin access

• Engaged a security firm to perform a threat hunting exercise (assumed compromise)

• Implemented standard security controls such as MFA for VPN and cloud services

• Performed a risk assessment and created a security improvement roadmap

• Migrated mailboxes and other data to the parent’s cloud services

• Planned the migration of their ERP system to the parent’s ERP

Global leader in personalized medicine acquires US sterile compounding pharmacy

Our initial client was a US-based sterile compounding pharmacy whose founders were nearing retirement and seeking an exit. We later worked on behalf of the acquiring company to secure, integrate, and transform the business they had acquired.

Exit Readiness

With the goal of putting the seller’s best foot forward in the private equity marketplace, we helped prepare an IT overview for the investor presentation, responded to buyer due diligence requests, and represented our client on diligence calls. This led to the successful sale of the business and a secure retirement for its founders.

Digital Transformation

Working on behalf of the acquiring company, a global leader in personalized medicine, our mandate was to secure the newly acquired assets, integrate the business with parent to realize estimated synergies, and lead digital transformation projects. Expand these topics below to see the initiatives we successfully lead utilizing local IT, parent company IT, and various partners.

Leading US pharmaceuticals supplier acquires branded pharmaceuticals manufacturer

Our client was a pharmaceuticals supplier seeking acquisition of complementary businesses. The target was a similarly sized manufacturer of branded pharmaceutical products.

Digital Transformation

Soon after their two-year earnout period ended, the acquired company faced a ransomware attack, and our client brought us in to manage the incident and improve the security posture of the company. Then we performed standard integration projects. Finally, we supported the combination of the two commercial teams by developing new order-to-cash processes and adding data integrations between the two ERP systems.

Global leader in personalized medicine completes divestiture of contract manufacturing business in US

Our client was a global leader in personalized medicine seeking divestiture from their non-core contract manufacturing business in the US. The principal buyer was a PE firm seeking an add-on for one of their platform companies.

Exit Readiness

Because we previously worked with this client providing CIO services to the business being sold, we were a natural choice to respond to their buyer’s IT due diligence requests, represent the business on diligence interviews, and negotiate a clearly defined and reasonable transition services agreement.

The two biggest challenges for which we provided the most value for our client were: 1) Demonstrating to the buyer that a previous ransomware incident had been properly managed and that new security controls were implemented. 2) Ensuring our client wasn’t committing to an unending transition period and were only responsible for reasonable and specific carveout activities.

Digital Transformation

Post-acquisition, we lead the execution of the TSA on behalf of our client which included many carveout activities:

• Splitting up ERP data and documents following strict definitions outlined in the agreement

• Automating new order-to-cash workflows between our client and the carveout company

• Setting up processes to provide stock visibility for inventory still owned by our client

• Duplication of EDI services and modification of the ecommerce website

• Migration of email mailboxes and other cloud data and documents

• Duplicating and/or renegotiating IT contracts