M&A integration in healthcare and life sciences sectors

What: “M&A Integration: Fast or Slow? Who: Jessica Kosmowski, principal, Deloitte Consulting LLP Larry Montan, director, Deloitte Consulting LLP Iain Bamford, senior manager, Deloitte Consulting LLP Frances Yu, senior manager, Deloitte Consulting LLP When: Available immediately Where: www.deloitte.com/us/maintegrationdebate   Details: Integrating separate entities is vital to a successful merger and acquisition. Since an integration plan usually identifies the desired end state early on, why delay the process of getting there? In practice, determining the best pace for integration is not that simple, particularly when it comes to managing customers through the integration maze. When is faster better? When does patience pay off? “Every integration process has unique requirements, but in most cases, parties inside and outside the new organization benefit more from a speedy marriage,” said Kosmowski. “Most important are the measurable benefits that the parties sought when they initiated the new relationship — whether expressed in terms of economies of scale and the resulting cost reductions, market growth, a simple intellectual property play or whatever other factors made the combination a good idea in the first place. The sooner those results arrive, the sooner integration becomes accretive.” Kosmowski noted that fast, effective M&A integration, however, takes more than simply choosing a pace. “Speed invites error, increases execution risk and often makes mistakes more costly. The key is smart integration and that requires careful planning before the process begins; careful, aggressive execution while under way; and organization-wide discipline.” Bamford, Montan and Yu spice up the debate with perspectives from the financial services, technology and healthcare and life sciences sectors, respectively:

• Financial Services.  The principles that make a fast process advisable for financial mergers also apply in other arenas when a distressed property is acquired. Whenever customers, employees and stakeholders need reassurance, a protracted mating dance is not the answer.

• Healthcare/Life Sciences.  Many health and biotech mergers find the acquirer entering a young, emerging market by absorbing a smaller, more agile player that has made rapid strides in carving out new territory. And, these smaller players have worked hard to develop solid customer and distributor relationships — often relying less on their brand and company muscle and more on high-touch sales and service. Their customers and distributors will not wait long for the newly acquired and integrated company to get its act together.

• Technology.  From a top-line perspective, there is tremendous pressure for fast integration to "stop the ice cube from melting" — to minimize M&A-related revenue leakage and customer churn. Following through with quick decisions and clear communication can help empower the sales force and improve the Day One experience of both customers and employees.

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