Building a healthy foundation for growth
KPMG helped a U.S.-based Fortune 500 medical supplies distributor establish global finance operations in the midst of acquiring an $800 million, 50-country company.
Client
A Fortune 500 medical supplies distributor
Sector
Life sciences
Project
Finance systems transformation
Client challenge
Acquiring an $800 million company with a presence in over 50 countries was an important strategic move for this major pharmaceutical and healthcare product distributor. As one of the major players in the crowded U.S. pharmaceuticals sector, company growth depended on overseas markets. This acquisition gave the company access to previously untapped markets, but did not include financial resources in the new markets.
As a result, creating comprehensive financial processes globally as part of the deal, many from scratch, was a significant challenge. Closing the deal was one thing, but without visibility into the financial situation of this major new acquisition, the organization’s ability to make fully informed decisions was limited. The solution they came up with would set the standard for future acquisitions, so it needed to be effective and scalable.
An integrated team approach, drawing on expertise from across KPMG, was critical to the success and speed of the solution.
Approach
Ensuring financial systems and processes keep pace with business ambitions
The acquisition of an $800 million dollar medical products business began the transformation of this primarily U.S.-based distributor into a more diversified and global business. While the transaction provided significant growth opportunities, the financial strategy, planning, and governance issues ahead were immense.
KPMG worked with the client to ensure post-acquisition readiness. Together we:
1
Designed and implemented the future state global finance operating model. Each country and region was evaluated to determine the appropriate level of finance and accounting support. In the context of the new operating model, assigned finance and accounting processes to corporate, county/region, shared service, or outsource to maximize efficiency and improve accuracy.
2
Designed and documented core finance and accounting processes, such as monthly close and monthly reporting, that enabled the client to transact and manage the new business from Day 1.
3
Conducted rapid assessment of technology options to support transactions in 50+ countries. KPMG assisted the client in setting up the finance function across the globe and provided local and statutory reporting requirements as part of international general ledger system design.
An integrated team approach, drawing on expertise from across KPMG, was critical to the success and speed of the solution. In addition to finance integration services, KPMG also provided new operating model and processes across the U.S. and other regions globally. This meant coordinating the set-up of new legal entities in diverse countries to sync with the acquisition deal timeline. Impact on a wide range of functions and processes had to be considered as the business consolidated—for treasury to supply chain, regulatory to HR.
Benefits to client
Newly acquired global entities are integrated into the organization, expanding the international reach of the company from 4 countries to more than 50. The acquisition and integration also:
1
Enabled speedy completion of a strategic acquisition with significant overseas revenue.
2
Developed global financial processes to provide insight into the performance of the newly acquired entities.
3
Established frameworks and processes for global controls and compliance.
4
Opened new opportunities for the company to explore tax advantaged organizational structures.
5
Readied the company for smoother and faster onboarding of future acquisitions.
KPMG insights
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When acquiring globally, it pays to think big
For clients undertaking complex global integrations who want to move fast, pure strategic thinking isn’t enough. Such projects usually require a holistic approach that considers organization, technology, process, data, and controls to generate a unified solution. Robust project management tools and accelerators are key to integration success.
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Look beyond acquisition for sustained growth
It’s one thing to complete an acquisition on time and another to keep a growing company on track. Once clients hit their target date, acquisition stabilization is key. Outlining a roadmap and identifying benchmarks for future success unifies companies and sets a clear financial path forward.
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When you want something done right, don’t do it alone
To implement global solutions efficiently and accurately, it pays to work together. Bringing in an experienced team with proven industry success helps ensure seamless integration in the present and creates the foundation for growth in the future.
Meet our team
Joe Moawad
Principal, Finance Transformation, KPMG US
Joe Moawad
Principal, Finance Transformation, KPMG US