Are you overlooking the “X Factor” in Biopharma M&A? asks JLL expert

When Merck & Co (NYSE: MRK) acquired Schering-Plough in 2009, the corporate real estate team reduced the combined companies’ occupancy costs by $300 million within three years - making a significant contribution to the $3.5 billion merger synergy goal. For Merck, the value hidden within the corporate real estate portfolio was the “X factor” that contributed to the transaction's success.

According to professional services and investment management firm JLL experts, biotechnology and pharmaceutical companies, including small and mid-size firms, can ensure a positive M&A by using three primary strategies: engage the real estate and facilities function early; identify immediate integration cost savings; and be diligent about change management for long-term success.

“While real estate is only one of the key factors that determine the success of a merger or an acquisition, it is often the ‘X factor’ where contributions that surpass expectations can be found,” says Roger Humphrey, executive managing director of JLL’s Life Sciences team, who led Merck’s corporate real estate department during the Schering-Plough merger. “When used strategically, corporate real estate can help a buyer edge out the competition for the greatest return on the deal,” he stated.