I thought I would put pen to paper on this subject as I’ve recently been working with several pharmaceuticals clients who are now in the process of planning their exit strategy from the business and needed input to understand how their investment in IT would impact the value, and saleability, of their business.
Whilst looking forward to reaping the rewards of many years hard work, one factor that is often given little thought is that of IT systems. Of course we all take our IT for granted …. It just works (or at least hopefully it does… if not, then please ask me about our IT Support services for pharmaceuticals!). But of course with hundreds of different options for hardware, software, applications and cloud services, the reality is that every network is unique.
This isn’t an issue when running our own business, but when it comes to the potential sale of the business, then it’s something any potential acquirer is going to want to know about in detail as part of their due diligence. Integrating the IT systems of seller and acquirer is often no mean feat and may impact significantly on both the cost of the acquisition and the operational logistics and timescales of the merger.
Naturally we all want to maximise the value that we get when we realise our capital, and IT forms an important consideration, when you are going to be “dressing the business for sale”.
So here are some key considerations to think about when you start planning your exit strategy:-
• Do you understand what systems you’ve got and how they work to support, or indeed lead, the business?
• Do you have IT systems documentation to give a potential buyer that would enable them to assess the costs and complexity of integrating your IT systems with theirs?
• Do you have a clear understanding of how your IT services are maintained and supported, who the various third parties are that are involved, what contracts and notice periods are in place and the associated costs?
• Will your procedures and documentation around critical compliance issues such as cyber security and disaster recovery policies give your buyer the confidence and reassurance they need?
• Will the IT systems, processes or contracts that you have in place today negatively impact the value or saleability of your company?
• If so, what changes need to be implemented in preparation for exit?
My own experience is that these activities are best started early, as they can take significant time and effort to understand and implement, but are well worth the investment since they are a key part of forming the exit strategy and maximising the business value.
If you would like to explore pharmaceuticals exit planning further, or you need your current IT systems to be unravelled, documented or improved as part of your exit planning, then please do not hesitate to contact me on 01494 444065 or email gary.swanwick@epoq-it.co.uk.
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