The right merger and acquisition (M&A) deal can help position your pharmaceutical business for success. But how do business leaders know if a potential transaction is the right deal for their goals? Although often a bit of a gamble, there are steps you can take to help better ensure the deal sets your business up for success. Some tips to achieve this goal include:
- Consider a non-disclosure agreement. Before moving forward with negotiations, it may be a good idea to have a mutual non-disclosure agreement in place. This will help to better ensure information shared during negotiations remains confidential.
- Complete due diligence. Gather and review financial documents to review the target group’s assets and debts. It is also important to look into regulatory compliance for any potential past violations or investigations.
- Put together a non-compete. As noted in a recent publication by the National Community Pharmacists Association, when purchasing a pharmacy part of the deal is the reputation that comes with the target business. A non-compete helps to better ensure leaders of the purchased pharmacy do not start another, competing group within the same market.
The pharmacy marketplace is complex, so it is wise to navigate these deals carefully. Thorough due diligence is important to mitigate the risk of violating a regulation or law during the transaction.
It is also important to avoid boiler-plate documents during these transactions as they do not account for issues that may be unique to your negotiations. Instead, have documents drafted specifically for your transaction to help better ensure all potential issues are addressed before the deal is finalized.