Digatus has successfully managed the IT Carve-out of CordenPharma from International Chemical Investment Group (ICIG)
Company Profile: CordenPharma
CordenPharma is a full-service CDMO (Contract Development and Manufacturing Organization) for the global market that supports biotechnological and pharmaceutical innovators in developing complex modalities throughout their drug development cycle. By leveraging the collective expertise of its teams in its globally integrated network of facilities, CordenPharma offers customized outsourcing services covering the entire supply chain – from early clinical development to commercialization.
With scientific competence and partnership at its core, CordenPharma provides its clients with valuable end-to-end services with a strategic focus on peptides, oligonucleotides, custom lipid excipients, lipid nanoparticles, sterile injectable products, and the extensive provision of small molecules.
The CordenPharma Group includes 12 sites in Europe and the USA. In the fiscal year 2022, the company generated revenues of 870 million Euros and employed over 3,000 staff.
Carve-out Profile
- Client: CordenPharma International GmbH
- Seller: International Chemical Investors Group (ICIG)
- Investor: ASTORG
- Transaction Value: About 3 billion Euros
- Size: Approx. 3,000 employees, ~ 870m€ revenue
- Industry: Pharmaceuticals & Biotechnology
- Headquarters: Plankstadt, Germany
- Location: 12 sites in Europe & USA
Initial Situation and Objective
Following the acquisition of CordenPharma by the private equity investor Astorg in August 2022, we were able to stand out in an intensive selection process against numerous competitors and convince CordenPharma of our suitability as consulting partners for IT carve-out management.
The goal for CordenPharma was to be carved out from its previous owner ICIG (International Chemicals Investors Group) within the agreed TSA duration, while being transformed into an independent standalone operation.
In October 2022, we received the mandate to create an IT carve-out concept, which was subsequently used as the basis for the entire IT carve-out.
Challenge
One of the biggest and most exciting challenges was the available timeframe from the kick-off. Due to the existing integration depth into ICIG, we had to consider the full range of IT for the carve-out.
Additionally, at the turn of the year 2022/2023, three of the total twelve sites affected by the carve-out were in a PMI (Post Merger Integration) of a previous acquisition – this further increased the complexity of the project.
As a full-service CDMO, CordenPharma is regulated by the FDA (Food and Drug Administration). To meet the corresponding regulations, we had to stick to the quality specifications according to GxP at all times and during all separation activities.
The largely heterogeneous IT infrastructure, the site-specific qualification and validation requirements, and the six different separation and operation providers with a total of over 70 project participants made efficient, perfected carve-out management essential.
Approach
Concept
In October 2022, we received the mandate to create a carve-out concept, which was approved by CordenPharma and ICIG at the end of January 2023.
In the carve-out concept, we analyzed and evaluated core components such as ERP, non-ERP, infrastructure, and security in terms of their current state. For the design of the target state, we considered customer and industry-specific requirements as well as economic efficiency criteria, standardization, and the required separation speed to achieve the timeline for the standalone target.
Provider Selection
From February 2023, we supported CordenPharma, based on the developed concept, in the search for new technical separation and operation providers for ERP and infrastructure.
With the help of objective evaluation criteria, taking into account industry requirements and based on future needs, we were ultimately able to find the ideal providers in a “best of breed” approach.
Carve-out Management
During the separation activities between April 2023 and January 2024, we had to manage the six providers and over 70 participants within the carve-out management team.
Thoughtful risk management, a special focus on GxP, and a closely coordinated approach with all stakeholders were crucial for the success of the project and allowed us to maintain quality, time, and costs within the planned framework.
Roll-Out Management
In the fourth quarter of 2023, a significant portion of the site migrations were carried out. We supported the global branches within the rollout with over 20 participants at 6 locations, ensuring the reliable adherence to the tight timeline.
Client Benefit & Conclusion
Through the fundamental conception, targeted support in provider selection, and consistent management at all levels, CordenPharma was carved out and transformed into standalone operation earlier than planned.
More than three months of TSA duration were saved, equivalent to over 1 million Euros. Ensuring optimal client benefit was always our highest priority.
Our excellent project structure allowed for a clear division of tasks and responsibilities, ensuring efficiency and transparency throughout the process. The consistent project management ensured that processes were tailored to the specific needs of the new mid-sized company. This customized approach helped make the transition seamless for CordenPharma and maximize the value from the collaboration.
He has been working in the IT environment for almost 20 years, gaining experience in a wide variety of roles and areas. Through his years of experience as a service manager, he knows the challenges and needs on the customer side. He has been applying this deep understanding and knowledge at digatus for over two years. As a project manager, his main focus is on IT M&A, where he mainly manages carve-out projects.
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