Sonic Healthcare USA

Laura Segovia

Acquisitions – Benefit or Bust?

Acquisition of businesses can be a key component to a company’s overall growth strategy and strategic competitive positioning, as long as there is thoughtful and deliberate planning to integrate the new organization and maximize value to the shareholders. In order to avoid a slow and costly integration, organizations should consider developing these plans well before any deal actually closes. Understanding that the overall goal with any acquired business is to extend and commercialize their services or products and return value to shareholders as quickly as possible, a swift and efficient integration process is paramount to the new organization’s success. To help facilitate this, experienced Project Manager(s), who report to and follow the lead of the Project Sponsor(s), should lead/coordinate the various process improvement, infrastructure (e.g., network connectivity and new/existing system, middleware, and interface implementations and enhancements), and other technical and operational changes as well as new/ enhanced product(s) commercialization, stakeholder communications, training(s), and other integration efforts. Depending on the size and scope of the acquired business and associated integration requirements, there may be a preference to treat and manage the business integration as a program (or multiple programs) which may include dedicated Product and/ or Portfolio Manager(s) who collaborate with the Program and Project Manager(s). A single Project Manager may even be able to manage each of these technical and business integration and product commercialization initiatives if within a reasonable scope.

Central to this theme is that planning and integration should start pre-acquisition during the company’s due-diligence phase. As there are a number of predictable issues that are anticipated before any business deal actually closes, planning and strategizing the proper communication(s) to the right stakeholder(s) at the right time(s) and also proper, timely action speeds the melding of the new company and can unlock synergies quicker. Key areas to consider include: function integration with respect to Finance and Human Resources departments and as it relates specifically to laboratory services, regulatory, and compliance integration tasks, also product reimbursement. Another area that becomes more complicated and time-consuming as technology continues to advance is the integration of the new company’s Information Technology (IT) and supporting platforms. As these platforms help businesses communicate with both external and internal clients efficiently, slow execution can negatively affect service-levels and worse, allow the new business and other impacted stakeholders to feel as if they are operating on an island without visibility to the rest of the organization and other colleagues.

Key considerations and lessons learned include:

• Creating an early “Integration Plan” that seeks to map out the first 120 days of integration tasks and accountable individual(s).

• Assessment of risks (both positive, or opportunities, and negative) and liabilities found during due-diligence, also Mitigation Planning to hopefully reduce/eliminate and timely resolve risks.

“A single Project Manager may even be able to manage each of these technical and business integration and product commercialization initiatives if within a reasonable scope.”

• Identifying quick-win projects that require collaboration of teams comprised of employees from the acquiring company and the newly acquired company. This helps to integrate the new company into the existing company’s culture and provides the new employees access to individuals to ask the early ‘stupid’ questions to understand how things work in the organization.

• Providing clear communication and action to the new company employees the day of close regarding any benefit considerations when there are meaningful differences in health plans or other company benefits, such as time-off accruals and policy.

• If some functional processes or platforms are completely new to the acquired organization and the people using them, consider planning specific training sessions to help the new entity get up to speed quicker and execute on tasks that matter most to the shareholders.

• Provide clear Organizational Charts and roles for the “Parent Organization” so the new company can easily navigate to the proper team or individual when the need arises.