You’ve just acquired a Healthcare Business and now the hard work begins

Most acquirers are good at deals: the due diligence, negotiation, structure and the financial modelling that justifies the multiple.

From my experiences, where things tend to go wrong is in the twelve months that follow. Specifically, in how the acquiring group handles the human side of integration, the leadership team they’ve inherited and the gap between what they assumed they were buying and what they’ve inherited.

I’ve worked in executive search within healthcare for the past decade. I’ve been involved in placing senior leaders into businesses, both before and after acquisitions. This has provided me with a ringside seat as to what good looks like and the costly mistakes.

My advice is:

The inherited leadership team isn’t the leadership team you have moving forward

The SLT has performed admirably under a longstanding owner or Managing Director. However, the skills often required to run a £20m autonomous business are different from the skills required to run a £20m business within a £200m group.

But, changing these isn’t always the answer.

Some individuals will transition brilliantly. Others will struggle. Not because they lack capability, but because the context has fundamentally changed and nobody has properly equipped them for it. The worst outcomes happen when acquirers assume continuity is the safe choice and delay the hard conversations. Fast-forward twelve months and performance has deteriorated, culture has fragmented, and the cost of putting it right is significantly higher than it would have been earlier.

This doesn’t mean you go in and replace everyone. It means you go in with clear eyes and a structured view of who in that team represents a genuine asset, who needs support and development, and who may not be right for where this business is going.

Last year we headhunted a Finance Director. 75% of his role was at local, acquired manufacturer level. 25% was to integrate and train FDs from recently acquired businesses. He’s helped four acquired businesses get up to speed with the rigours associated with group level reporting; how the systems work, and nuances to what the CFO needs in board reports. To the best of my knowledge, no one has been replaced.

Be deliberate about who you put in alongside the inherited team

When there are gaps to fill, the calibre and cultural fit of the people you bring in matter enormously. It sets a tone. A strong external appointment signals ambition, raises the bar, and should galvanise the existing team around what “good” looks like.

I was recently involved in placing two C-suite hires within a different Healthcare business. The parent company’s VP was clear about what she needed: direct communicators, people who knew where they stood, no ambiguity. Not because the business was in trouble, but because clarity and pace were going to be critical during the transition period. Those hiring criteria, cultural and behavioural, not just technical, are what determine whether the integration would succeed. The existing team responded well to both appointments precisely because the new arrivals were the right fit, not just the right CV. This involved me completing psychometric assessments and subsequent interviews based against these reports on them. The SLT at local level also met with the preferred candidates, and extended factory tours were completed.

It’s a lot of effort and time, but you’ll reap the benefits in the short term. Get it wrong and you can destabilise the very thing you’ve just paid for.

Communicate early, often, and with more clarity than feels necessary

On the flip side of securing new leaders for acquired businesses, I’ve interviewed dozens of candidates who plan to leave them.

Yes, the landscape for Healthcare, Digital Health and Medical Devices industry has changed. However, good people have options. If they can’t see where they fit in the new structure, or if they feel the parent company is disengaged or opaque, they’ll start been more receptive to the types of speculative calls that I make.

The businesses that retain their best people through acquisitions are the ones where the acquiring group over communicates. Not just to the senior team, but through the layers. People need to understand what the acquisition means for them personally – to their role, their career, their security. In the absence of that communication, they’ll fill the vacuum with assumptions. Those assumptions are rarely positive.

Build the relationship, not just the governance

Reporting lines, KPIs, group processes all matter. But the quality of the relationship between the acquiring group’s leadership and the acquired business’s team is what determines how fast trust builds, and therefore how fast performance improves.

In my experience, the parent companies that get this right are the ones who invest personal time early. Who get on a plane. Who have lunch rather than another Teams call. Who make it clear, through behaviour, not just words, that the people they’ve acquired matter to them and not just as a line on a P&L.

Assuming you’re protective of key staff, this type of investment pays dividends that no governance structure can replicate.

Acquisitions in Healthcare are accelerating. Private equity is active. Buyers are consolidating. The businesses being acquired are often strong, well-run, and full of capable people.

The acquirers who get the most from those businesses are the ones who treat the human capital with the same rigour as the financial capital. The deal is the beginning of the story, not the end of it.

The good news is that this is entirely avoidable. It just requires intention, honesty, and a willingness to have the conversations that need to be had, both early into the relationship, directly, and with the long term in mind.

If you’re inquisitive (or “acquisitive” pun intended) to discuss more about my experience and the best practice investors have incorporated to ensure the smooth integration of a recently acquired business, contact me now.