Pharma Medical Device CRO Sale - Corporate Finance in Europe

Business case M&A deal Pharma Medical Device CRO Sale

The company for sale was a medical device CRO in Germany
The acquisition was for an Enterprise Value of more 1 miliion €, including earn-outs
The buyer is a Nordic corporate, part of a EUR 300 million group with a track record of successful acquisitions and integration in the healthcare and pharma space
CFIE advisory services: The CFIE M&A team advised in the full process of the company acquisition. High valuation demands were negotiated, with other keys aspects including culture fit, future investment in growth of the acquired company, and proper financial modelling, following distortions caused by losses and the 2020-21 pandemic. A stringent due diligence was passed with flying colours. Existing management and owners were retained for a transition period.

Deal Overview

The acquired company focusses on CRO services for medical device firms. These services are mainly provided as part of regional CRO consortia projects, with the acquired firm taking responsibility for local submission to German authorities. Additional services, include medical writing for publication in academic journals and presentation at conferences, training, and statistical analysis. After over two decades in business, the owner decided on a sale to a corporate rather than to a financial buyer as the ideal succession plan. German tax rules were another important consideration for both, buyer and seller.

Strategy of Buyer of this Pharma Medical Device CRO Sale

The buyer is a fast-growing pharma services subsidiary of a larger Nordic group. Following its acquisition not long ago, a medical device unit was formed and the acquired company will be merged into it to benefit from expertise and commercial synergies.

Under a unified brand, the combined services of the medical device CRO and lab supply businesses will grow much faster both, in the Nordic and EU markets served individually before.

Further, under a larger company, the medical device division can now bid for larger contracts on its own, unlike before when a large share of revenue was as subcontractor to other CROs.

One or two more medical device CRO acquisitions would allow the firm to become one of the top five players in medical device CRO services in the EU.

Activities of the CFIE M&A team in the support of the Pharma Medical Device CRO Sale

The CFIE Pharma M&A team provided advisory in this medical device CRO sale in the full process of the acquisition by a Nordic corporate. Likewise, CFIE was highly instrumental in the due diligence process, thanks to its German language capabilities, which allowed it to give document summaries to the Nordic acquisition team. This support was particularly valued by the acquiring firm’s CEO and hired German legal team.
Given CFIE’ s multi-lingual pharma team, detailed explanations were also provided of nuances in German accounting impacting the enterprise value.
Significant rapport was built with both, the seller and buyer teams thus allowing for a smooth flow of information, trust building, and an unusually fast closing after only nine months.
In addition to standard M&A work like drafting of teasers, confidential memoranda, financial modelling, business forecasting, and data room organizing, a lot of effort went into direct communication by the two CEOs.

Investment highlights

Complementary markets and expertise will result in new revenue for the combined entity
Agreements were reached on financial incentives for key staff retention, CEO continuity, and new staff hiring
Some cost synergies are forthcoming, from shared IT infrastructure, expensive debt retirement, and a move to a cheaper nearby location
The buyer has an aggressive growth plan for this medical device CRO company, with financial rewards for the CEO and staff
Existing clients of both companies will benefit from the additional, specialized services of both, the acquired medical device CRO and the new parent company.
Clients will benefit from a trusted single-source supplier, able to meet their needs across several EU markets.

About Corporate Finance in Europe

Feel free to contact us for further details about this Pharma Medical Device CRO Sale. If you are looking to a sale of a Pharma or (medical device) CRO feel free to contact us at pharma@corporatefinanceineurope.eu. Here you can find other CRO companies for sale (link below). Please get in touch in case via the contact form at the right side of this page so we can explain how we can help you in the area of Pharma and medical device CRO sales or acquisitions.
https://www.corporatefinanceineurope.eu/pharma/cro-companies-for-sale/