Impact of M&A activity on R&D Productivity & Innovation
0 likes495 views
Mergers & Acquisitions are a necessary and beneficial part of the business Lifecycle but can be disruptive and diminish the value of the asset(s) being acquired. The integration of R&D organizations in particular may be delayed for legitimate reasons that can negatively impact morale, productivity and innovation. This presentation provides R&D leaders with practical insight into the role they play in securing a success integration.
Impact of M&A activity on R&D Productivity & Innovation
- 1. Impact of M&A Activity on R&D Productivity & Innovation Daniel L. Mooradian, Ph.D. Chief Scienti鍖c Of鍖cer Innova Medical Design LLC Marcus Evans Medical Device Summit 2012 Colorado Springs, CO
- 2. Objectives ≒ Mechanics of Deal making ≒ Discuss trends in Medical Device M&A ≒ Explore the Challenges facing R&D ≒ Share my experiences (R&D centric) as a survivor and student of the subject ≒ Invite you to share your experiences! Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 3. Introduction ≒ Mergers & Acquisitions are a necessary and bene鍖cial part of the corporate life-cycle ≒ Small companies - often the preferred strategy to create investor value ≒ Mid-/Large-Companies - a path to growth via optimization of new or existing sales channels Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 4. Source: www.鍖ercemedicaldevices.com Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 5. Medical Device M&A Trends ≒ Strong M&A activity in the Medical Device and Biotech sector through Q2 of 2012 ≒ Modest activity Q3-Q4 2012 based on uncertainty regarding the election outcome, healthcare reform, etc. ≒ Marketplace seems poised for resurgence in 2013 Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 6. Medical Device M&A Trends ≒ Signi鍖cant capital on the side-lines even VCs claim to be eager to invest! ≒ Trend in large companies away from organic R&D ≒ Trend in start-ups toward strategic partnership vs. traditional VC route for start-ups Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 7. The M&A Process R&D INVOLVEMENT LOW LOW-MEDIUM HIGH xeon-international.com/services/corporate-鍖nance/ma/the-ma-process Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 8. Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 9. Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 10. M&A Challenges ≒ Mandatory adoption of cumbersome processes can strain resources ≒ Reorganization - loss of key management, changes in reporting can impact morale ≒ Shift in priorities by OPS, Quality, M&S can reduce availability to support product development leading to delay Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 11. Pipeline Value/Technology ≒ Often an attractive sweetener during due diligence. ≒ The acquired may believe that they will have a new source of support for innovation ≒ Not the Norm. Cost of acquisition (which comes at the expense of existing businesses) makes it dif鍖cult to double down before the value of the acquisition itself has been con鍖rmed! Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 12. Strategies to improve R&D integration Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 13. Integration Team ≒ Make sure you are represented on the Integration team ≒ Engage your functional counter-part ≒ Realize that everyone involved has a day job ≒ Seek opportunities for your Senior staff to participate in key integration activities ≒ Make integration a priority Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 14. Process Knowledge ≒ What is your new Innovations Process? ≒ What is your new companys Budget Process? ≒ Who are the key decision-makers? ≒ Are you adequately represented? Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 15. The Deal Model ≒ Make sure you understand what constraints have been placed on your current and future budgets as part of the acquirers deal model ≒ If growth in R&D is not built into the deal model then it will be very dif鍖cult to grow post-acquisition. Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 16. Next Years Budget ≒ You new organization is already working on next years budget! ≒ You are already at a disadvantage ≒ Learn how budget decisions are made ≒ And who makes them! Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 17. Protect Resources ≒ The deal-model will set limits on unit expenditures post-acquisition ≒ If your needs are not re鍖ected in the deal- model then you are at a disadvantage ≒ Pressure on OPS/Manufacturing/Quality (and Clinical) will put existing and future R&D resources at risk ≒ You must 鍖ght for position or risk decline Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 18. Protect Resources ≒ Critical R&D employees who are not protected by CIC agreements must be identi鍖ed and protected via retention agreements if possible ≒ Protect against 鍖ight ≒ Promote engagement ≒ Reduce uncertainty and anxiety Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 19. Preserve Corporate Culture ≒ The post-acquisition period is one in which culture can play a critical role in guiding behavior in the face of uncertainty ≒ Too little emphasis is placed on the integration/assimilation of culture in mergers & acquisitions ≒ Repeat your core values often to yourself and others. Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 20. Communicate! Staff New Management Peers No news is NOT good news! Copyright 息 2012 Daniel L. Mooradian. All Rights reserved
- 21. Thank you! Copyright 息 2012 Daniel L. Mooradian. All Rights reserved