Post acquisition distributor due diligence

 

Challenge

Our Fortune 500 medical technology client, made a major acquisition of another life sciences company. As part of the acquisition, the client required the target company to conduct full due diligence on 300 distributors, mitigate any identified red flags, and report results to the board in a very short timeframe.

The client engaged us for several facets of the project including:

  • Aligning the target company’s needs with the client’s overall due diligence programme
  • Determining appropriate levels of due diligence for each distributor
  • Sending questionnaires to all the distributors and tracking completion
  • Reviewing reports and questionnaires for red flags
  • Providing alerts and metrics to the client
  • Advising on appropriate follow-up steps to mitigate red flag

 

Answer

The target company engaged us to provide a combination of services:

Risk Rating and Categorisation

  • Risk rating each third party against a number of key factors that aimed to focus the right attention on the ones that were the highest risk
  • Recommending appropriate levels of due diligence and providing advice on red flags discovered through due diligence and the best way forward to work with this distributor

Managed Due Diligence Services

  • Sending questionnaires to all 300 distributors, and tracking progress of their completion.  This required constant reminders and chasing to get the profiles completed by the distributors
  • reviewing the submitted questionnaires and addressing any immediate issues or concerns around completion
  • Ordering due diligence reports based on a risk rating model developed above and coordinating efforts with our global research teams to produce the reports in different countries around the World
  • Analising the reports and providing alerts to the client around specific distributors, red flags and the best way to move through the identified red flags
  • Assembling metrics based on project, for presentation to the board by the target company

Through our support, the target company finished its screening project ahead of schedule and successfully integrated its distributor base into the client’s channel.

 

Why The Red Flag Group?

  • Speed. We are quick in getting this work done.  Our work is scoped well, managed well and delivered on time.  We have a 98.5% delivery rate on all our work and we measure this across all our services.
  • Industry Knowledge. We know the healthcare industry.  We know what we are looking for when assessing risk in distributors and we know how to look for risks in dealing with health care professionals. 
  • Country Knowledge. This project was across 20 countries.  We had the team ready to engage in the project and we had the language expertise that we needed on staff and ready to go.
  • Channel Experience. The risks in the channel are significant.  Corruption, money laundering, counterfeit products, bid riggings, related party transactions, kickbacks and more.  We know what we are looking for and we report clearly on our results.

 

Deliverables

  • Full consolidated report summarising findings of project with a full suite of recommendations and guidance on how to remediate issues identified.
  • Individual due diligence reports on all 300 distributors across over 20 countries.

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