UNITED NOTIONS: Corporate and Cultural Convergence in Life Sciences M&A 2021
For the second consecutive year, Mintz, an Am Law 100 firm, and Mergermarket, a company providing intelligence, data, and analysis on global M&A deals, partnered to produce a comprehensive report on recent M&A activity in the life sciences.
The report showcases the results of a survey of 100 US-based executives – CEOs, CFOs, and heads of M&A – and presents data on deal volume and valuation of life sciences mergers from 2016 through Q1 2021.
UNITED NOTIONS is a comprehensive look at the health of the industry and an insightful view of current trends as compared to a year ago, with an emphasis on post-deal integration and critical factors influencing merger success.
Insights from Executives
Survey respondents had engaged in merger activity in the 18 months prior to being surveyed in Q1 2021, so their knowledge and experience are fresh. The questions posed were both quantitative and qualitative in nature and resulted in some interesting comparative data sets in addition to new information. A sampling:
Some COVID-related changes may stick around, such as larger integration teams including professionals from across more administration departments.
In a significant increase over last year, nearly two-thirds of sellers (64%) received more than their targeted sales price for their business, including 18% that received over 20% more than expected.
There is evidence that retention of employees should be a higher priority: 57% of respondents said that post-merger leadership departures were for preventable reasons.
Compared with last year’s report, 61% more execs said future mergers would be improved by greater focus on integration.
The strength of the life sciences industry is on full display, with M&A activity booming and corresponding markets like the Nasdaq Biotech Index remaining in comparatively strong positions.
Deal-making has continued through an exceptionally disruptive period as COVID-19 has shut down economies, kept employees at home, and prevented traveling. And while our survey shows that life science businesses have faced challenges in, first, getting deals completed and then, managing the process of post-transaction integration, the majority of respondents rate the process as having been successful.
The survey emphasizes several key areas and provides insights through the eyes of executive who have recently been through deals, providing insight into:
What is driving deals and how that may be changing
The value derived through early integration planning
The importance of emphasizing cultural fit in the deal process
Among the 100 executives responding, 70% recently acquired, were acquired by, or merged with a US company, while 30% acquired, were acquired by, or merged with a non-US company. In their most recent deal, 50% of respondents were buyers and 50% were sellers.
For additional life sciences M&A insights from recent activity, click here to access Mintz and Mergermarket’s report, “United Notions: Corporate and Cultural Convergence in Life Sciences M&A 2021.”