PRA International acquired CroMedica on June-17-2002. This merger gained it ranks among top 5 global contract drug development organizations. As I read this article, I wondered what are some benefits and potential challenges of this merging.
Some benefits of merging mentioned in this article are as follows:
1-PRA Int.’s presence has extended across the globe. After the merger, they will be running services in Europe, Canada, South Africa, Australia, Brazil and North America.
2-The merger resulted in an increase in jobs. According to this article, PRA International hired more than 1800 employees.
3-Company’s annual net revenues increased to more than 200 million.
As company’s portfolio becomes more enriched and it acquires more skill set and increased specialization of functions and services, it faces certain challenges that were not mentioned in this article.
Due to a bigger company size, obvious friction in communication between upper and lower management, is expected. This may reduce the flow and ease of information within the company. Also, it would be difficult to manage a relatively bigger infrastructure. Cultural differences are bound to exist as two very different companies merge together. In the past, cultural differences within companies have shown to cause resistance and sabotage by its employees. This has shown to prevent growth and in some cases, it has tarnished companies’ reputation. These challenges can be easily overcome if PRA International defined and implemented appropriate strategies and desired outcomes of the merger.
Given PRA International’s proven track record of internal growth and strategic acquisition, I believe that the company would easily overcome most of the above mentioned challenges and continue to grow and prosper. One example of such internal growth is Flex DMS ( TM ), an advanced data management software developed by PRA International in 2006. This software combines both electronic data capture and paper data entry in one easy to use system.
Owing to it’s strong management team, business models and proven track record of strategic initiatives, Genstar Capital re-invested in PRA International, in Dec 2007. The first investment was done in 2001. PRA International is still proving to function optimally as it expands in Asia, Mexico and Europe.
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