Transformative: these acquisitions are large, affecting more than 50% of either company’s market capitalization or greater than US$10b in deal size, and strategically meaningful to “transform” the company into something different. They provide the opportunity to enter new markets, transform the way the company operates and have a cross-border component. They involve multiple business units and therapeutic areas, and they tackle complex issues with HR, IT, supply chain, finance and tax, among many others. Synergies are a meaningful portion of the value generating hypothesis including cost and revenue components.
Bolt-on: this is a small- to medium-size acquisition and most likely less than 25% of the buyer’s market capitalization in a new high-growth area, or an area adjacent to the core. It offers a means of diversifying while leveraging part of the same platform, infrastructure or skill set. It also helps expand a market offering, including beyond the pill solutions and
platforms of care, while primarily focusing on revenue synergies.
Geographic expansion: this encompasses a collaboration, joint venture, direct investment or acquisition in another life sciences target in a different geography — not to be confused with cross-border transactions that are part of a larger transformative transaction.