ASQ Innovation Division arranged a Webinar named
“Finding the Hidden Gems - Setting Acquisitions Up for Success” on 18th
Dec 2020. The due diligence definition
refers to the comprehensive appraisal of a business undertaken by a prospective
buyer, especially to establish its assets and liabilities and evaluate its
commercial potential. The purpose of due diligence is to set up the acquisition
(company, product, license, etc.) for success. This webinar aimed to state the
role that quality plays in due diligence and learning the keys for successful
due diligence key areas of focus.
Mr.
Alon Ben Jacob (Quality Director Acquisition and Divestiture, Medical Device
Division) was guest speaker and his talk included M&A and Due Diligence
process on quality perspective. Firstly he introduced the definition of mergers
and acquisitions (M&A) which is a combination of two organizations into a
new single organization. However, the failure rate was upto 70-90%! (Harvard
Business Review, June 2016)
Then
Mr. Jacob briefed the definition of Due Diligence that was a comprehensive
appraisal of a business undertaken by a prospective buyer. It aims to evaluate its commercial potential.
After
that he briefed what is Quality Due Diligence during M&A process that
included risk classification, understanding of core quality function, QA
audits, integration planning, etc.
And
then Mr. Jacob discussed the phases for effective quality due diligence. The first step is to request general QMS
information and second step is requested for specific QMS records and
procedures to demonstrate their execution. The last step is to deep dive of
specific areas in medical device.
Finally,
Mr. Jacob shared his experience on post-acquisition audit findings. For general
observation per QMS, it was found that the top three of observations were “Quality/Compliance
Systems”, “Production and Processes Controls” and “Facilities, Utilities &
Equipment”. After analyzed observations,
the top four observations were “Inadequate Process and/or Procedure”, “Missing
Supportive Documentation”, “Inadequate Action Definition” and “Failure to Follow
Procedure”.
Lastly, Mr. Jacob quoted Elon Musk
statement meaning that feedback loop is important for continual
improvement. Then he shared some
leassons learned from due diligence below:
-
Onsite/virtual visit is a “MUST”.
-
Routine touchpoint with Target
Company.
-
Appropriately engage cross
functional peers as part of due diligence (RA, R&D, Clinical, etc.)
-
Provide clear and detailed
report on observations
-
Timely communication with
target company
- Ensure frequent communication with deal leader
Reference:
ASQ Innovation Division - https://asq.org/innovation-group
ASQ event - https://my.asq.org/events/item/60/2520
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