International healthcare group: strategy development for a billion-dollar acquisition

18 May 2021 — 1 min read

Healthcare & Pharmaceuticals

Mergers & Acquisitions

Context

Our client, an international healthcare group, was looking to diversify their geographic footprint and expand into new markets. The international CEO had identified a potential target but needed help evaluating inorganic growth against potential strategic alternatives and conducting a detailed assessment of the deal’s potential risks, synergies, and proposed integration model before presenting the transaction to the group’s board.

The result was a clearly articulated strategic assessment of the strategy and the target, which led to the board engaging Elixirr to develop the strategy and investor presentation for a new business line.

Why Elixirr?

We have global consulting and industry experience across the end-to-end M&A lifecycle, bringing strong strategic and commercial acumen, market expertise, and hands-on execution experience.
We provide access to a team with deep first-hand experience across the deal lifecycle. Our acquisitions team has defined Elixirr’s inorganic strategy, mobilised a pipeline of targets, structured and negotiated deals, and successfully completed three high-impact acquisitions to date.
This first-hand experience means we go beyond advice to drive tangible results. We understand the risks, opportunities, and pressures involved in M&A processes, and partner with you to navigate each stage of the lifecycle. We get invested and treat clients’ businesses like our own.
Our global innovation network provides us with access to frontier insights and firms, enabling us to quickly understand nascent market dynamics and compare targets’ performance against market leaders and new entrants.

01 Overview

This international healthcare group needed support to evaluate inorganic growth against potential strategic alternatives, as well as a detailed assessment of the deal’s potential risks, synergies, and proposed integration model. The leadership team had conducted initial due diligence with support from another strategy firm but, given the size, scale, and potential complexity of the acquisition, wanted the Elixirr perspective before presenting the transaction to the group board.

02 Outcome

Deep insight on the strategic trade-offs, specific target, and deal value to enable a go/no go decision for the group board.

03 Method

Acquisition strategy

The challenge

To make an informed decision, this international healthcare group needed support to evaluate inorganic growth against potential strategic alternatives, as well as a detailed assessment of the deal’s potential risks, synergies, and proposed integration model. The leadership team had conducted initial due diligence, but given the size, scale, and potential complexity of the acquisition, they needed validation before presenting the transaction to the board.

The approach

Our team partnered with the international CEO and CFO to conduct a rapid assessment of the inorganic strategy and target, to validate and shape the recommendation to the board. This included:

Assessing and articulating the group’s inorganic strategy and the role of M&A in achieving the group’s growth objectives, considered against other strategic options. This included forecasting the group’s performance against revenue diversification targets to understand the relative importance of inorganic growth.
Reviewing existing due diligence to identify critical gaps, opportunities, and risks, and supported the international CEO in defining mitigants for the risks identified.
Conducting further research to supplement the macroeconomic review of the new markets, identifying the key areas of impact, relevant demographic trends, and complementary products and distribution channels in the client’s existing offering.
Identifying and quantifying potential synergy cases for the target identified, identifying net new value creation opportunities for the group to exploit, and forecasting the top-line financial impact.
Assessing the proposed integration plan and organisation structure, including operational and resource synergies, and developing an initial programme plan and considerations for further due diligence.
Discussing potential funding options for the deal, based on the group’s objectives and impact to enterprise value.
Developing a recommendation for the group board, outlining the rationale for the target acquisition in relation to the group’s strategic objectives, growth targets, and value creation objectives, and presenting an initial view of the potential synergies and proposed integration approach.

The value delivered

We provided the global healthcare provider with a clear understanding of the strategic options to accelerate growth, and the trade-offs based on their objectives and organisational capacity. We delivered deep insights on the target, new markets, potential synergies, and acquisitions risks, which was well-received by the board. Based on the work delivered, the board engaged Elixirr to develop the strategy and investor presentation for a new business line.

"Faced with a sizeable and strategically important acquisition opportunity, we asked the Elixirr team to review the opportunity and deal strategy and its impact on our wider business strategy. As is the case on most deals, this was a very time-sensitive exercise and I was impressed with how quickly the team evaluated and understood the complex situation, and subsequently worked with us to mitigate the potential risks identified. The Elixirr team worked side-by-side with my executive team and took ownership of the problem in a way I have not seen from other consultancies – they treated our business with the same passion as if it were theirs. We have since engaged them on one of our other important growth programmes."

CEO, International healthcare group