Acquisitions

Considering expanding or acquiring a new business or manufacturing plant/facility to increase production capacity? Playbook execution of Acquisitions and Divestitures are similar (reversed) in many ways, but Acquisitions require far more business and IT due diligence efforts and insight to fully understand total cost of IT ownership (pre and post-sale). EMS IT Leaders can quickly assess business requirements, assist with negotiations, identify risks, and defining a transition plan with key milestones and phases that define a successful, timely, and lower cost acquisition. The following not only identifies important IT tasks, duties, and responsibilities that can be found in any playbook, but also emphasizes very important aspects of a divestiture requiring proper knowledge and expertise when customers engage an EMS IT leader.

IT Due Diligence

Planning and due diligence is critical when considering acquiring a plant or manufacturing facility. Understanding footprint of facilities, manufacturing requirements (blue printing), capabilities to grow and expand, manufacturing/Plant floor and IT system infrastructure, and logistics all play an important part of selecting a business or facility that meets current and future business needs.

Total Cost of Ownership

Understanding total acquisition costs of ownership and annual costs are essential to determine if acquiring a manufacturing facility is feasible. Determining resources, IT assets, and IT infrastructure requirements must be done quickly and efficiently.

Business Process Fitting

When acquiring a manufacturing facility, determining if the facilities’ IT assets will (or will not) support your business (manufacturing) process is one of the most important challenges. Being able to quickly evaluate current, transitional, and final state of IT assets to determine if any capital improvements will be required and how much will it cost must be done during due diligence.

Asset Inventory

When acquiring manufacturing assets (infrastructure, manufacturing equipment, and IT Systems) a careful review and analysis must be done to determine current and future business needs are met. Not understanding current state of assets can be very costly down the road when improvements are required.

Resource Planning

Defining the correct manufacturing and technical skill-sets, number of resources, and determining what needs to be outsourced are all key decisions to manage and operate your facility and maintain a healthy bottom line. Understanding when and how to automate manufacturing and/or business processes to reduce manual labor can be extremely important.

Negotiating with Buyers

Negotiating Manufacturing and IT assets on an acquisition effectively can save a buyer thousands, even millions, of dollars, reduce startup costs, and overall timeline of an acquisition. Understanding what, when, and how to negotiate with sellers can mean the difference between a long and expensive acquisition, or a short, low-cost, fast startup, and effective sale.

APA / TSA Negotiations

Asset Purchase Agreement (APA), Letters of Intent (LOI), Transitional Services Agreement (TSA) are all confidential types of legal documents used to engage buyers and define the assets or Supply agreement sale and buyer’s liability. Understanding how these documents are used, what should or shouldn’t be included, takes careful reviewing, extensive experience, and knowledge to know how and what to negotiate.

Asset Negotiations

Being able to understand how and when to negotiate the transfer of assets can save buyers millions of dollars on the deal and future maintenance costs. Having experienced negotiators that can evaluate current state of assets and agree on favorable asset transitional terms directly impacts the bottom line.

Transfer of Ownership

Transferring ownership of a facility or business is a critical milestone of any acquisition. Change Management Proceeses are extremely important, along with compliance, starting up, transitioning assets, and business continuity. Detailed planning and experienced, knowledgeable resources that understand how to cut over a business plays an important role.

Transition Planning

Understanding how assets (infrastructure, equipment, IT systems) are transitioned and ready for use can mean the difference between success and failure. Not knowing almost guarantees prolonged startups, manufacturing interruptions or delays, quality issues, and cost overruns.

Starting up Manufacturing

After understanding how assets are transitioned, defining a quick startup plan after obtaining ownership is critical. Understanding how to minimize change, leverage existing GMP documentation, standard operational procedures, business processes, and staffing a manufacturing facility correctly all are key components to reduce startup time and be in full production.

Compliance and Audits

Most buyers experience several (regulatory and environmental) audits after acquiring a facility and starting up a GMP manufacturing facility. How a facility’s assets and documentation are transitioned and maintained can determine a company’s “readiness” for an audit and being able to successfully pass an audit.