This thesis deals in general with mergers & acquisitions in the CRO industry, and more
specifically with reasons for M&A, success factors during the M&A process, and why
M&A can fail in the Contract Research Organization industry.
The pharmaceutical industry faces increasing obstacles in respect to the development and
introduction of new medications. That has to do with stricter requirements for admission
and sharper controls by authorities. Today, the research and development of a new drug
can easily consume more than $800 million and lasting between 10 and 15 years. Due to
these admission, money and time pressures, pharmaceutical companies are looking for an
alternative in the drug development process. A very popular alternative is the outsourcing
or in-house working with Contract Research Organizations (CRO). Contract Research
Organizations are specialized in coordination and monitoring of drug development
activities. Due to their focus they often offer a more sophisticated and faster process.
Demographic changes, chronic diseases like cancer and diabetes, and completely new
cluster of symptoms demand new therapeutically treatments. The size of the CRO market
in 2012 was around $32 billion and had an estimated market growth of around 9 – 12% for
2013. Increased outsourcing and allocation of R&D money towards CRO reflects a driving
force for prospective growth. To benefit from the good industry outlooks CROs adjust
their service offerings and strengthen their competitive situation.
More and more Contract Research Organizations consider mergers & acquisitions as a
vital solution to achieve their objectives. Since couple of years we can observe an
increased number of deals. Large corporations can close the gaps in the internal service
pipeline and smaller firms can use mergers as a financial exit.
However, many M&A activities are considered as ineffective and contra-productive for
the shareholder value – either destroy or merely add. Depending on the study, the numbers
of M&A failures vary from 50% to even 80%. Possible reasons may be not enough
integration planning and unrealistic expectations on the cost and time. The reality shows
that it is not that easy to cut costs by simple combining two departments after a merger or
acquisition. Additionally, we can see that mergers and acquisitions basically not succeed
during the actual process.[...]
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- METHODOLOGY
- MERGER & ACQUISITIONS FUNDAMENTALS
- DEFINITION AND HISTORY
- TYPES AND HISTORY OF MERGER & ACQUISITIONS
- RECENT M&A TRENDS
- CONTRACT RESEARCH ORGANIZATION INDUSTRY
- THE DRUG DEVELOPMENT PROCESS
- FUNDAMENTALS OF CONTRACT RESEARCH ORGANIZATIONS
- STRATEGIC ANALYSIS OF THE DRUG DEVELOPMENT MARKET
- Macro environment - PESTEL
- Microenvironment - Porter
- GROWTH STRATEGIES IN CRO INDUSTRY
- Structural Changes in the CRO Industry
- Growth Strategies
- Mergers & Acquisitions in the CRO Industry
- EXPLANATORY APPROACHES AND MOTIVES FOR M&A
- STRATEGIC MOTIVES
- Synergy
- Market Power
- Portfolio Hypotheses / Diversification
- FINANCIAL MOTIVES
- Valuation Theory
- Tax Hypothesis
- MANAGERIAL MOTIVES
- Hubris
- Agency Hypothesis
- STRATEGIC MOTIVES
- SUCCESS FACTORS FOR THE MERGER & ACQUISITIONS PROCESS
- MERGER & ACQUISITIONS PROCESS
- The Planning Phase
- The Execution Phase
- The Integration Phase
- POTENTIAL SUCCESS FACTORS DURING THE M&A PROCESS
- Potential Success Factors in the Strategic Planning Phase
- Potential Success Factors in the Execution Phase
- Potential Success Factors in the Integration Phase
- MERGER & ACQUISITIONS PROCESS
- CASE STUDY: MERGER & ACQUISITIONS IN THE CRO INDUSTRY
- DATA & METHODOLOGY
- WHY M&A OCCUR IN THE CRO INDUSTRY
- POTENTIAL SUCCESS FACTORS FOR THE M&A PROCESS IN THE CRO INDUSTRY
- Strategic Planning Phase
- Execution Phase
- Integration Phase
- REASONS FOR SUCCESS FAILURES FOR THE M&A PROCESS IN THE CRO INDUSTRY
- DETERMINANTS AND EVALUATION FOR SUCCESS AFTER THE M&A
- CONCLUSION AND RECOMMENDATIONS
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research paper explores the dynamics of mergers and acquisitions (M&A) in the Contract Research Organization (CRO) industry, analyzing the driving forces behind these transactions and investigating the crucial factors for successful integration.
- The fundamentals of M&A in a global context.
- The strategic landscape of the CRO industry, examining its growth strategies and the role of M&A.
- The various motives behind M&A in the CRO sector, encompassing strategic, financial, and managerial perspectives.
- The importance of strategic planning, execution, and integration in achieving successful M&A outcomes.
- The identification of success factors and potential challenges in the context of CRO M&A.
Zusammenfassung der Kapitel (Chapter Summaries)
The research paper delves into the multifaceted world of M&A in the CRO industry, offering a comprehensive analysis from the definition of M&A to the factors driving success and failure.
- Chapter 1 provides a foundational overview of M&A, outlining its definition, historical development, and recent trends within the global market.
- Chapter 2 presents a detailed analysis of the CRO industry, examining its role in drug development, the challenges and opportunities within the market, and the specific considerations for M&A in this context.
- Chapter 3 explores the diverse motivations behind M&A, delving into strategic, financial, and managerial perspectives. The chapter analyzes key drivers such as synergy, market power, diversification, and the potential for value creation.
- Chapter 4 focuses on the M&A process itself, outlining the critical stages of planning, execution, and integration. It also examines the potential success factors at each stage, providing insights into the strategies that can facilitate positive outcomes.
- Chapter 5 presents a case study specifically examining M&A activities within the CRO industry. This chapter utilizes data and methodologies to analyze the specific reasons for M&A in this sector, identify key success factors, and investigate the potential challenges to successful integration.
Schlüsselwörter (Keywords)
This research paper focuses on the dynamic interplay of mergers and acquisitions, strategic growth strategies, and the evolving landscape of the Contract Research Organization industry, with specific emphasis on the challenges and opportunities presented by these transactions. It delves into key concepts such as synergy, market power, diversification, strategic planning, execution, and integration. The analysis draws upon real-world case studies and empirical evidence to illuminate the critical factors for successful M&A outcomes in the CRO industry.
- Quote paper
- Bachelor of Business Administration Jakob Miera (Author), 2013, Mergers & Acquisitions in the Contract Research Organization Industry, Munich, GRIN Verlag, https://www.grin.com/document/262330
