Bolt-on integrations can extend reach, deliver niche product development and increase innovation. They are seen to be a game changer for Life Science organisations, helping them penetrate new markets with exciting and revolutionary therapies.
In the search for innovation and growth, the Life Sciences sector is seeing an increase in the acquisition of smaller organisations as bolt-on integrations, to drive pipeline development and diversification. These bolt-ons are likely to have an entrepreneurial start-up culture, be highly innovative and are often not yet generating revenue or profit.
The bolt-on strategy is moving established players into new therapy areas. For these acquisitions to be successful they must reassess their traditional sales, commercial, operational and R&D models.
It’s vital to understand how to integrate the bolt-on into the legacy structure and culture of the acquirer. Whilst these types of integrations are less disruptive than large scale transformational acquisitions, they are not without risk and could ultimately erode value without a coherent plan to manage the process.
Acquirers in Life Sciences should allow for flexibility across key people and culture areas when planning to integrate bolt-on acquisitions, so acquired companies remain unique and drive incremental value.
The value in bolt-on acquisitions is the people that come with the business. They are the ones who will develop the products, share the innovation, bring the energy and build the vision. The acquirer needs to handle this ‘asset’ in a considered and proactive way by introducing tools that protect and realise the commercial potential.
We’ve been supporting organisations in this area for over 25 years and, based on that experience, we believe that getting the people and culture elements right – from the very outset – is key to success. There are three key areas that organisations should focus on:
- Talent acquisition
- Organisation design and talent management