Background and Challenge
L.E.K. Consulting initially developed an M&A strategy for our client, a ~$20B global biopharmaceutical company. Our client acquired a biotechnology company in a ~$2B+ transaction based on this strategy. L.E.K. was engaged to lead and manage the development of post-close integration plans. Revenue growth was the primary synergy driver, but economies of scale were also targeted in manufacturing and back office functions. Particular risks included the retention of key talent across the target organization to ensure the capture of short and long-term synergy opportunities.
Approach and Recommendations
L.E.K. lead the formation of the integration management office (IMO), which included creating a tracking system to monitor milestones, address potential risks and interdependencies, and enable integration activities. We also provided dedicated assistance to several integration teams, including manufacturing, R&D, product development, human resources (HR), information technology, and finance. L.E.K. developed a novel talent retention strategy that balanced business continuity with longer-term retention of key talent. In collaboration with the HR team, we developed an on-boarding approach that addressed important people-needs within the target organization. Finally, L.E.K. provided critical analytical support in the decision to consolidate manufacturing and worked to develop detailed synergy-capture and integration plans to migrate manufacturing programs, processes, people and equipment.
With L.E.K’s support, the client was able to integrate the organization seamlessly, while ensuring business continuity during the transition period. The need to retain key talent within the target organization, a critical concern for our client, was successfully addressed. Ultimately, ~90% of placement offers were accepted by personnel of the target company. L.E.K. guided the seamless integration of the two existing R&D operations and their respective research technology platforms, helping to ensure a highly collaborative work environment going forward. Synergy targets were achieved and the combined company had significant success in further developing its R&D pipeline.