How an Interim Manager supported an international pharmaceutical company in complex M&A processes, scenario planning and the optimization of impairment testing
International M&A processes in the pharmaceutical industry require speed, precision and reliable decision-making frameworks. Especially when several transactions are being evaluated simultaneously, market conditions are constantly changing and investment decisions must be made under significant time pressure.
An internationally active pharmaceutical company was facing exactly this challenge. Together with the internal M&A department, an interim manager supported the company in building complex valuation and scenario models, analytically managing transactions and further developing key financial processes across the group.
Growth driven by international acquisitions
The German pharmaceutical group operates successfully both nationally and internationally and maintains its own sales network through numerous subsidiaries.
Its business model combines the development and commercialization of proprietary medicines with the strategic expansion of its portfolio through the acquisition of external patents and brands. The company focuses primarily on pain management therapies and adjacent therapeutic areas.
A key component of the growth strategy was the targeted acquisition of patents with sufficient remaining protection periods. The objective was to commercialize these products globally through the existing international sales organization and significantly increase revenues before generic competition could enter the market.
As revenues typically decline after patent expiration, the continuous evaluation of new acquisition opportunities was essential. At the time, the group was simultaneously involved in several M&A processes with a combined potential transaction volume exceeding EUR 1.4 billion.
To support the internal M&A department, an interim manager was brought into the project.
From deal analysis to group-wide steering
The project aimed to provide both analytical and operational support for ongoing transaction processes within the internal M&A department.
The first step involved building detailed sales, revenue and scenario models for different products, countries and market developments together with the internal business units.
Based on this work, the project focused on:
- developing robust business plan models for different transaction scenarios
- modelling variable cost structures and market developments
- preparing DCF valuations for multiple transactions
- identifying key value drivers and risks
- providing reliable decision-making support for management and the supervisory board
As the project progressed, the scope was expanded further. In addition to supporting ongoing M&A processes, the interim manager also took responsibility for supporting impairment testing for international subsidiaries and later assumed responsibility for group-wide scenario planning..
Complex valuations in a dynamic market environment
The first phase of the project focused on analysing the ongoing acquisition opportunities.
Together with Business Development, Sales, Production and international sales teams, extensive workshops were conducted to develop scenarios for different markets and pharmaceutical products.
Comprehensive business plans and valuation models were then created for each transaction.
One of the main challenges was the rapidly changing market environment, including:
- rising inflation
- significant interest rate increases during the project period
- varying regulatory conditions across international markets
- continuous adjustments based on due diligence findings
- the parallel execution of multiple transaction processes
As a result, valuation parameters and scenarios had to be continuously updated and expanded.
The goal was to identify the key value drivers of each transaction and derive reliable pricing indications as well as alternative transaction scenarios.
This enabled management to make well-founded decisions and position itself effectively within competitive sales processes..
Streamlining processes and increasing transparency
During the second phase of the project, the existing impairment testing process for international subsidiaries was analysed and fundamentally redesigned.
Each process step was reviewed, restructured and simplified.
The result:
- significantly leaner workflows
- improved transparency
- more efficient coordination processes
- better traceability of valuation methodologies
The new processes and methodologies were subsequently presented to and successfully defended before the external auditors.
The optimized approach was fully accepted as part of the annual financial statement process.
From an M&A project to group-wide steering
Due to the successful collaboration, the interim manager later assumed responsibility for group-wide scenario planning.
Based on the ongoing M&A activities and changing market parameters, central financial and growth scenarios for the entire group were developed.
These scenarios served as the basis for:
- future product launches
- additional acquisitions
- financing decisions
- debt financing initiatives
- strategic growth decisions
Particularly important was the ability to respond quickly and effectively to short-term requirements from management and the supervisory board under considerable time pressure.nd des Aufsichtsrats unter hohem Zeitdruck strukturiert umzusetzen.
The result: Greater transparency and faster decisions
The interim manager’s support enabled the company to manage several major M&A transactions in parallel while significantly professionalizing key finance and valuation processes.
At the same time, existing impairment testing procedures were sustainably streamlined and made more transparent.
In addition, a robust group-wide scenario planning framework was established as the basis for strategic decision-making.
Why analytical expertise alone is not enough
Complex international M&A processes demonstrate how critical the combination of analytical depth, communication skills and operational execution truly is.
Especially in dynamic market environments, companies require reliable scenarios, rapid decision-making capabilities and experienced interfaces between management, business units and external stakeholders.
Or, as Winston Churchill once put it:
“It is no use saying, ‘We are doing our best.’ You have got to succeed in doing what is necessary.”
Best regards
Your HANSE Interim Management
Andreas Lau
