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Changing times, consistent practices: Mergers and acquisitions in life science in the COVID era

Author: Jennifer Stango, Director, Strategic Engagements, Arbela Technologies

It takes more than scientific innovation in the lab to fuel success in life science in the COVID era. It also takes a strategic approach to the business of life science. Mergers and acquisitions (M&A) have historically shaped the life science industry and continue to shape its future as well. With COVID, the focus on M&A as a fundamental business strategy has only increased as the pandemic has forced many companies to reevaluate strategy. More than ever, many major life sciences companies are looking to M&A to increase market share, create new focus areas, optimize their supply chains, and further digital transformation.

Continuity is Key

The challenge — which existed long before COVID — is continuity. How can a business take part in an M&A — a process that often creates a fundamental change in thinking around creating value, driving revenue, building and selling new products and services — and maintain the fundamental systems that manage operations?

It’s not just people, products, and processes being “merged and acquired” – it’s platforms like ERP and CRM, data warehousing solutions, and the systems that make doing business possible. These foundational business systems should not impact one company’s ability to acquire, or be merged into, another. ERP and CRM should not be a roadblock to the M&A process.

Given this, buyers (a.k.a., “acquirers”) are looking for companies with proven processes and technology – this includes financial reporting systems, accounting system, purchasing, production management, quality, CAPA, and more. They often want to minimize risk by ensuring a target company uses a known ERP, which provides automated controls, and helps ensure data integrity and quality assurance in this highly regulated market.

Flexible, Dependable Business Systems Driving Success

In addition to security and continuity impacting adding new entities, speed and efficiency also factor greatly. The need to rapidly roll a new acquisition into your existing system needs to be nearly routine. Microsoft Dynamics 365 provides this to a company.

Microsoft Dynamics 365 helps ensure business operations move fluidly throughout the M&A process. As the industry-standard solution, and with an unequaled level of flexibility (via customization suites such as PowerApps), Microsoft Dynamics helps provide a near-seamless M&A process for life science companies.

No other company offers the same combination of industry expertise and business technology experience, and life science companies on “A” side of an M&A have an immediate advantage with Microsoft Dynamics 365 as their foundational system.

If you are the seller (i.e., the “M” side of the M&A), your needs are different. For example, while your new parent company may not require you to be using a certain platform, they will invariably require you to quickly produce financial statements, demonstrate KPIs, and deliver validated reports on, for example, security practices as part of their due diligence. And there may be cases wherein only a part of your business is being acquired, which means you’ll need an easy and effective means of “decoupling” departments, products, or even teams.

Microsoft Dynamics 365 helps a seller quickly make its case to a buyer, enabling it to deliver reporting on R&D processes and practices, data security and dissemination, audit capabilities, manufacturing, profitability, and more. Due to its inherent flexibility (e.g. storing data and solutions in Azure, rather than on-premise), Microsoft Dynamics also makes it easier for a company to separate out an entity for M&A, and rapidly integrate its data and processes into a new parent company.

In the end, many life science M&A successes are assured by the technology on either side of the equation. Yes, it starts with the science itself: that’s what kicks off an M&A. But it’s the business systems that often get an M&A across the finish line. Using a known solution, like Microsoft Dynamics (and its defined and repeatable operating processes, reporting, and systems and data security practices), can help make any life science M&A an easier undertaking.

While there’s no secret to success in an M&A, there is often a system. For many life science businesses, the answer is Arbela Technologies and Microsoft Dynamics 365.

To learn more how Arbela can support your expansion strategy, register for our upcoming webinar "Leveraging Technology to Drive Successful Life Science M&As in the COVID-19 Era and Beyond".