ASQ Webinar - Finding the Hidden Gems - Setting Acquisitions Up for Success

 ASQ Innovation Division arranged a Webinar named “Finding the Hidden Gems - Setting Acquisitions Up for Success” on 18^th 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