WWT Helps Pharma Spin-off Acquire Separate $7B Company During an Ongoing Divestiture
WWT M&A team saves a global pharmaceutical company $28 million by leading separate acquisition and divestiture proceedings during the COVID-19 pandemic.
In This Case Study
On its own, divestiture is a highly complex process. Add a concurrent acquisition to the mix, and the challenges quickly mount.
One year after a $3 billion pharmaceutical business unit embarked on the process of spinning off from its parent company — and a mere nine months before that divestiture was scheduled to close — the same spin-off decided to pursue the equally intricate process of acquiring and integrating a wholly separate $7 billion company.
Already engaged to disentangle the spin-off’s IT footprint from the parent while facilitating the build of a greenfield IT environment, WWT’s M&A team was again tapped to plan and integrate the new acquisition’s IT environment.
Read on to learn how we helped our customer execute this complex acquisition that would ultimately set the new entity up for continued growth, innovation and success.
Adding complexity to complexity
WWT’s M&A team was initially engaged to help our pharma spin-off customer stand up its entire IT infrastructure and migrate its global commercial, manufacturing, and research and development footprint — all within 30 months. Feedback from external IT consultants at the time indicated that achieving this goal within a 30-month window was overly ambitious, if not impossible.
Challenges posed by divestiture:
- The current-state data between the parent company and spin-off was so intertwined that it was difficult to determine what assets belonged to which organization.
- The pharma spin-off did not initially have key IT staff hired. When positions were filled, the new leaders had their own opinions about key IT direction and decisions.
- Much of the inherited networking equipment was out of support, and configurations did not match documentation.
- The pharma spin-off had not yet established critical policies and procedures related to information security, quality assurance or change management.
- Selecting and contracting with managed service providers (MSPs) was delayed because the spin-off’s internal IT teams were competing for time with inundated Legal and Procurement teams.
As if those challenges weren’t enough, the pharma spin-off initiated the process to acquire a $7B company in the midst of the COVID-19 global pandemic.
Challenges introduced by acquisition:
- The need to establish a new third-party Carve Out Factory (COF) network bridge
- A lack of alignment between the acquisition and spin-off’s Information Security and Legal teams
- Country requirements for site access and new equipment procurement
- Global equipment shortages
- Big bang transition without a formal Transition Services Agreement (TSA)
- The involvement of multiple MSPs
- The need for identity services and application readiness in a second new greenfield IT environment
At the conclusion of all M&A and divestiture activity, the executives of the newly independent company shared this message with WWT:
WWT’s approach and solution
Relying on a comprehensive set of end-to-end offerings and tested capabilities, our M&A team excels at leveraging technical and business expertise to customize our approach to each M&A activity based on our customers’ changing needs.
Our M&A approach:
- Was future-focused to balance IT modernization outcomes and business outcomes
- Featured end-to-end IT deployment support, from strategy through global implementation
- Accelerated time-to-market, anticipated issues and reduced risks through lab testing
- Incorporated flexibility and cultural alignment through agile delivery processes designed to meet customer needs and adapt to changing environments
Our M&A team enabled communication and connectivity between the acquiring company and the third-party managed Carve Out Factory (COF) environment. The program was bound to a six-month timeline for a “big bang” cutover and go-live that needed to comprehensively cover identity creation, mailbox and OneDrive data migration, network bridge deployment, and services management set up. Migration types spanned commercial sites, warehouses, co-working and work-from-home spaces.
WWT leveraged our Advanced Technology Center (ATC) to design and build scalable, integrated technology solutions for the acquisition effort. We performed configuration activities in our North American Integration Center (NAIC) to reduce deployment risks, and we leveraged our global supply chain and partnerships to accelerate equipment delivery and reduce delays.
Using cross-functional domains, close collaboration and a focus on interconnectivity and related dependencies, WWT’s M&A team helped strategize and execute the following solution components for the pharma spin-off’s new acquisition:
- Infrastructure readiness: Our expert consultants provided strategic planning services for current and future-state needs to determine if the acquiring company’s IT infrastructure could support the new capabilities required as part of a plan to integrate new applications and services.
- Network bridge: We built a secure network bridge between the acquiring company and the third-party managed COF environment, which enabled connectivity between the two networks from Operational Legal Day 1.
- Identity: Our identity creation and credential trust solutions enabled users from each company to access necessary applications in the third-party managed COF environment as well as in the acquiring company’s environment.
- Migrations (site and user): We set up and reconfigured core infrastructure at all necessary sites; we set up end-user computing (EUC) environments for users; we migrated tenant files and user data; and we migrated email/collaboration services.
- ITSM: Our team ensured comprehensive user supportability on Day 1 by setting up key IT Service Management (ITSM) processes across incident management and change management.
Successful acquisition & integration
WWT’s partnership with the pharma spin-off resulted in the successful acquisition of the $7B company and integration of its IT environment — all while the spin-off was still working with WWT through the process of separating from its parent company.
By helping the spin-off successfully complete both the divestiture and acquisition efforts within the aggressive 30-month TSA window, WWT’s M&A team helped save the newly divested company an estimated $28 million in IT service and penalty fees.
Key insight: De-risking for COVID
The COVID-19 pandemic disrupted travel, logistics, real estate, physical access to property, supply chains and more. These unforeseen disruptions severely endangered the spin-off’s ability to fully integrate the acquisition’s IT environment, especially given there were only nine months left before the original divestiture legally needed to conclude.
WWT responded to the COVID crisis by modifying how we performed deployments and migrations. We also explored and implemented creative workarounds, such as utilizing new technologies to enable successful cutovers. These early decisions on how to de-risk for COVID set the pharma spin-off up to pursue strategic endeavors in the future.
Importantly, WWT accomplished this all while limiting exposure to the virus, protecting the customer’s employees and our employees while still ensuring delivery timelines were still met.
Key insight: Being decisive
The pharma spin-off and WWT elected to proceed with a top-down methodology for the acquisition. Meaning, if detailed information was not available, we would use our experience and knowledge from working with thousands of companies across the globe to make informed estimates in order to progress the work.
Leveraging an iterative model, we adapted our plans as more specific information emerged during the transaction. Our use of Enterprise Architecture as a framework for strategy and decision-making helped ensure all technical decisions were cohesive and aligned with larger business goals.
Key insight: Dependency mapping
The sheer scale, interdependent and time-bound nature of the acquisition — combined with a host of outstanding information and decisions to be made — not only made it difficult for the spin-off's teams to stay focused, but it also impacted active cross-team collaboration.
To address these challenges, WWT built a “team of teams” by establishing and following a strong program management model for day-to-day operations that reinforced key program philosophies around adaptability, resilience thinking, holistic understanding of a shared vision, and specialized skillsets.
Key insight: Visualizing success
Rather than setting up an internally resourced lab in the spin-off's environment to evaluate new technologies and test migrations, we leveraged WWT’s ATC to simulate the spin-off’s IT infrastructure, integrating colocation, cloud and site mock-up instances.
Using the ATC lab allowed the pharma spin-off to conduct testing more frequently and thoroughly without impacting the production environment. Security patches, system/service updates, firmware upgrades, new infrastructure and new software solutions were all vetted, tested and qualified prior to production release in the ATC. This reduced outage windows, cutovers and downtime during testing, which ultimately accelerated the spin-off’s time to market.