Virtual business: completing a merger online

Completing a UK/US merger can be a complicated and demanding undertaking at the best of times, let alone during a global pandemic. However, for UKI2S portfolio company Perfectus Biomed, and US-based Extherid Biosciences, this unique situation brought unforeseen advantages. We spoke to Sam Westgate, CEO, Perfectus Biomed, and Marnie Peterson, CEO, Extherid Biosciences, to learn how they successfully completed a merger entirely virtually, what made this possible and the insights they would share with others thinking of taking this path.

The background

Perfectus and Extherid both offer specialist microbiology and virology analytical services to businesses wanting independent validation of the efficacy and safety of their products in fields such as wound care and cosmetics. Their journey together began over three years ago as partners in a joint project which evolved into a growing relationship based on complementary technologies and expertise. Exploratory discussions about a merger revealed that both companies were looking for something the other could provide: “Marnie was looking for a step up in scale and function for Extherid and we wanted to secure a US footprint”, explained Perfectus CEO, Sam Westgate.

Over the following three years the two women built a successful business partnership, visiting each other’s facilities, meeting the respective teams, and mapping out how the two companies could come together in a joint enterprise. “It took time, effort and money to get to the point of merger, but it always seemed worth it. The commitment was there on both sides”, commented Marnie Peterson, CEO of Extherid.

What made it possible

Throughout our conversations with Sam and Marnie, it was clear that the key to the success of the merger was the good personal chemistry between the CEOs and complementary company cultures. Whilst the merger process took place online, it was based on a relationship that was nurtured over several years in person, giving both parties confidence in the partnership, and in the knowledge that they could have the greatest impact by working together as a single organisation.

Not only did both parties invest in the relationship, they also made sure company cultures were aligned. “We recrafted our missions and visions together before the merger to make sure that everyone in both companies was pulling together to achieve the same goal”, explained Sam. “We also made a concerted effort to ensure that staff from both companies felt part of one team, especially during lockdown, sending care packages out to the US and arranging virtual merger parties”, she continued. The strength of the merger plan was evidenced when COVID struck – many companies, amid the uncertainty, paused or cancelled merger plans, but both Sam and Marnie agreed to push forward with no slow down or furlough unless absolutely necessary.

This alignment in thinking was due, in no small part, to the ‘Goldman Sachs element’ as Marnie calls it. Both CEOs previously took part in the Goldman Sachs 10,000 Small Businesses programme, an investment programme to help entrepreneurs create jobs and economic opportunity by providing greater access to education, capital and business support services.

In a virtual world, infrastructure can make or break company progress, so the two companies quickly integrated their IT systems to bring the teams together and enable all staff access to the same data and systems. The logistical integration has allowed the seven-hour time difference between the two to be used as an advantage by creating a longer working day where the UK team can hand off work to the US at the end of its day, providing extended working days to clients and compressing project time lines. Extherid also agreed to a name change as Perfectus Biomed LLC, creating a single brand for customers.

New ways of working and new opportunities

Originally, in the first 100 days post-merger, both CEOs planned on frequent visits for team members to the other facility to enable team building, training and information transfer. COVID-19 prevented this but it has resulted in some unforeseen benefits. “Rather than one or two people travelling and being trained, we are now are able to train six or seven people across the company simultaneously online”, explained Marnie. “This way, everyone feels more involved and connected than they would do ordinarily, and we have avoided segmentation between the people who have been part of the process and those who haven’t”. It has also encouraged better communications between the teams.

Virtual working has also made the companies more productive, thorough and consistent. “Rather than waiting until we see each other, issues are addressed as they arise”, commented Sam. This new approach has also enabled the money saved from reduced travel to be channelled into company growth. Similarly, it has saved everyone time and it enables clients to meet with both CEOs simultaneously.

“It’s important to note that these are only advantages because of COVID – in a non-pandemic world a preference for virtual working would have communicated a lack of interest or commitment, rather than being the accepted new normal”, explained Marnie.

Challenges and learnings  

Even with frequent video calls, the fact remains that you can’t replace human interaction. Both CEOs struggled with not being able to gauge how the other team were doing; “you can’t pick up the vibe of the team over a Teams call, so you have to trust that if they tell you they are doing well, they are. This makes mine and Marnie’s relationship all the more important”, commented Sam.

A big take away from this process for both Sam and Marnie is the need to plan from the outset and to follow through. “Don’t let time run away with you – set your milestones and stick to them as much as possible”, said Marnie.

UKI2S’ involvement

“Our involvement with one of our original investors, UKI2S, throughout this process is a great example of how an investor can support a business from concept development all the way through to this merger. They have asked the challenging questions, making me hone my strategy and holding me accountable to meeting my milestones.” Commented Sam.

“UKI2S stayed involved throughout the merger and are very positive about being investors in the new entity, despite having never met me face-to-face”, added Marnie. “The confidence they have in the merger, despite both companies being smaller than is typical for a US-UK merger, is great to see.”

A new normal

“A significant benefit moving forward is that our clients are now open to virtual operations, and we can introduce this as part of our standard way of working. This new flexibility is extremely helpful with Marnie and I in different countries”, explained Sam.

“Some travel will be important to integrate the teams fully, but we are excited to take our learnings from this time forward and continue to work just as effectively virtually. We were both already committed to being as green as possible, and this is a big step towards that goal”, added Marnie.

As the companies complete their first 100 days post-merger, they continue to push forward, despite the global crisis. This team is absolutely one to watch.

About Perfectus Biomed Group

Perfectus Biomed Group has contract testing laboratories in Cheshire, UK and Wyoming, US. The UK lab is a GLP-compliant and UKAS accredited ISO 17025 laboratory, and in the US we work to ASTM standards where applicable and are ISO 9001-2015 certified laboratory. We are leaders in providing standard and customised microbiology testing services to clients in a variety of sectors, including wound care, medical devices, pharmaceutical, cosmetics, disinfectants, dentistry and oral care.

Incorporated in 2012 and located at SciTech Daresbury in the UK, Dr Samantha Westgate started Perfectus Biomed to fulfil an unmet need for excellence in biofilm testing, specialising in tailoring antimicrobial assays and performing customised, accredited biofilm methodologies. Dr Marnie Peterson founded Extherid Biosciences in 2016 to specialise in ex vivo tissue models for preclinical modelling.

Our dedicated team of PhD scientists adopt a client focused approach, working to commercial timescales to deliver market-leading microbiological testing. Most recently Perfectus Biomed merged with North American based Extherid Biosciences, thereby expanding both the range of services on offer and the global footprint of the newly formed Perfectus Biomed Group.

Perfectus Biomed Group supports a wide range of clients with outsourced microbiology and regulatory submissions, and all our services underpinned by our Quality Management Systems to ensure confidentiality, impartiality, quality and integrity.

 

Author: UKI2S

More From the Blog

Investing in UK Space Technology

At the UK Innovation and Science Seed Fund (UKI2S), we recognise the importance of...

read more

Supporting UK agritech innovation

R&D in the UK is thriving and extraordinary innovation can be found in all...

read more