Strategic Executive Search Success for a Leading Private Equity Client Amidst Challenges
Due to sustained growth and unexpected, non-performance related reasons, our Private Equity client found themselves seeking a CEO only 9 months after appointing one to its newly acquired portfolio company. Our client had acquired a founder-led business of 20+ years offering tailored services in both small and large molecule bioanalysis, brought in its own CEO, and suddenly found itself without a leader. The search was assigned to two other firms who worked the market for 6 months to no avail. When a new Board member was appointed, it was suggested they contact 3D CRO Group.
We had not previously represented this firm nor the organization on an executive search, and therefore, spent much time getting to know the company, its objectives, structure, and environment. We worked directly with the Chairperson, an Operating Partner of the Private Equity firm, and he was articulate about the expectations for the role, and ideal candidate qualifications, including the intangible traits that would be important for a strong cultural fit. He was candid about why things did not work out with the past two search firms and how critically important it was we moved quickly and efficiently.
The Chairperson wanted to expedite the search and begin recruitment activities immediately. It was mid November, and while we were able to begin the search, we were aware of the potential challenges that we might encounter beginning a search so close to the holidays. We were also concerned with attracting candidates that time of year with many executives expecting bonuses to be paid in January or later in the first quarter. We discussed these concerns openly with the Chairperson, and he respected and appreciated us being forthright. We jointly decided to begin the search immediately since all parties understood the potential issues.
Having ascertained much of the required information in meetings with the Chairperson, we dug in deeper to understand the key attributes, goals, and expectations for the role. From this point we were able to craft a position description as well as a tailored search plan to ensure success.
Due to the specific qualifications and traits desired, it was necessary to conduct a national search targeting high-level individuals within competing organizations to our client in addition to those “just off-center of the bullseye”. We targeted our focus on executives that had varied preclinical CRO backgrounds, multi-region experience related to the integration of several sites, past involvement with M&A, and a combination of sales and operational expertise.
Our client was presented with diverse candidate options and interviewed candidates from several states, an overwhelming majority of which 3D CRO Group already had an existing relationship. They came from a variety of organizations, including multi-national publicly traded CROs, Private Equity controlled CROs, and small, nimble CROs that were seeing strong growth.
Despite our initial concerns about beginning the search process in November, we completed the assignment in two and a half months. The client was highly collaborative, which made the assignment flow smoothly.
The Chairperson and Board selected a professional who had held his first CEO position with an indirect competitor. The individual had recently led the successful sale of that company to a Private Equity firm where he stayed on as a consultant for a short period to assist with the transition. His background included a PhD in Analytical Chemistry, and he had spent several years working at two separate Big Pharma companies before transitioning into executive leadership positions within pharma services. His professional references described him as having a strong reputation for combining strategic and systems thinking, building strategic alignment and commitment, and developing others. They said he develops trust and is an inspirational and aspirational leader.
We have spoken with the client and candidate many times since completing the assignment to ensure the transition continues to progress smoothly. As a bonus, we were awarded the opportunity to fulfill a VP of Business Development search in direct collaboration with the CEO we placed. Both successful searches led to numerous wins for all stakeholders.
Building a Transatlantic Powerhouse through Successful Non-Executive Director Searches
Working with the Healthcare Partner of a global private equity firm, 3D CRO was engaged to assist with a company which it had recently entered exclusivity. The firm envisioned taking the $30 million one-site US lab business and turning it into a transatlantic powerhouse. The desire was to bring on two non-executive directors (NED); one with operational expertise, the other commercial and have one in Europe and the other in the US. Each NED required hands-on experience leading a lab-based business to successful exit without the possibility of any conflict of interest.
Having known and worked with the company being acquired by our private equity client, we were able to generate a plan with the CEO and the investors in a highly collaborative approach. The goal of making 3-4 bolt-on acquisitions meant identifying individuals who had deep exposure to the private equity model.
We started by creating a roadmap with all pharma services companies which had been private equity controlled in the past ten years. We sought to balance candidates coming from the US with those from Europe in order to act as a counterweight to the US predominance in the platform business. We began with targeting CEOs, CCOs, and COOs of companies just outside of the bullseye who would not have a conflict of interest. We explored customer facing business leaders from global consulting businesses, and we identified recently retired executives who we were already familiar.
Seven candidates were presented across Europe and the US with two newly appointed NEDs 45 days from search inception. We were able to fulfill the aim that the composition of the Board anticipates the requirements of the strategy three years from the start, remaining ahead of the management team as it stood at present, and suitably reflecting the organization’s future objectives.
Because of the successful NED search, 3D CRO was engaged by the private equity firm to conduct four executive searches including a Chief People Officer, SVP Corporate Development, Executive Director Business Development, and General Manager / Site Head all of which concluded with excellent results.
One of the NEDs has since joined the private equity firm as an Operating Partner.
Successful US Expansion and AI/ML-Driven Drug Discovery Capability Development for a European Private Equity Portfolio Company
Working with the co-head and partner of a leading European private equity firm, 3D CRO was engaged to assist its portfolio company with a US expansion and development of a new service offering. Having a minority interest in the company, the private equity firm was seeking experts in the AI/ML-driven drug discovery space to create an investment thesis and framework to present to the founder and CEO. In addition, expanding into the US market required a heavy emphasis on developing a robust business development team which the firm’s network lacked.
We began immediately sourcing our network with the initial emphasis placed on AI/ML subject matter experts. On a prior board search, we had been fortunate to become well acquainted with two previous board members of the portfolio company before the minority equity investment by our client. These relationships proved immediately beneficial and garnered the trust and support necessary to conduct a thorough search.
During the course of mapping, the competitive landscape, we had become aware of an event featuring a variety of experts presenting on the impact of new AI models and technologies in Healthcare and Biotechnology. We conducted a comprehensive primary research campaign that focused on speaking with the panel members. Using competitor interviews, we were able to better define individuals who were AI builders/experts versus those who were more commercially focused. From this point, we identified market leaders, pharma partnerships, recent acquisitions, and developed a long-list of candidates for further review.
In parallel with the above efforts, we leveraged our expertise in business development team buildouts and educated the private equity client on the complexities of hiring in the US without a physical location, the federal requirements on healthcare, compensation packages, and answered one-off questions as they arose over the course of the project.
The investment thesis presented to the CEO was a big success. With 3D CRO’s help, the private equity client was able to make the decision to invest in a de novo build of AI/ML-driven drug discovery capabilities.
Two of the experts presented on the project were selected to lead the initial build phase on a consultative basis, and one was asked to present to the entire firm the impact AI may have across its fund strategy – including investment, portfolio, and productivity.
The commercial buildout resulted in five key hires including four individual contributors and a US team leader. The ideal locations for the hires were realized with a Boston-based, San Francisco-based, San Diego-based, and Philadelphia-based business development representative. The result has been excellent, with company sales more than tripling in the three years since the project.
Aiding Private Equity Client in Identifying Growth Pockets and Executing Strategic Acquisition in the Pharma Services Sector
A Private Equity client had been evaluating acquisitions into numerous pharma services companies to enhance its portfolio; however, identifying the right companies and executing on future adjacent areas to fuel growth seemed to be a daunting task. The company wanted to generate a long-term outlook within several key healthcare sectors, including laboratory testing services for drug development, in order to see where pockets of growth existed. The company enlisted 3D CRO to help identify subject matter experts and key executives to help the company gain a perspective on which areas of this evolving market appeared most attractive for investment and the integrated opportunities that could arise within its existing portfolio.
We started by mapping the lab testing landscape to assess the size of the candidate pool specific to executive leadership and subject matter experts. We dug in deeper to understand the key attributes, goals, and expectations for the fund. From this point we were able to craft a compelling story as well as a tailored search plan to ensure success.
Having a thorough understanding of the market, we knew it necessary to cast a wide net to include early preclinical contract research organizations and CDMOs as well as consultants performing services within these sub sectors. We were able to quickly weed out companies and individuals who did not possess multi-region experience related to the integration of several sites, past involvement with M&A, and a combination of commercial and operational expertise.
Despite our initial hesitation of beginning the search on an informal basis, we completed the assignment in sixty-five days. The client was highly collaborative, which made the assignment flow smoothly.
The General Partner and Lead Investor for the firm met and screened six candidates who could help conduct due diligence of several targets and develop detailed integration plans. Each candidate also helped to assess the competitive landscape, expediting the identification of a “sweet spot” for a large molecule lab testing investment.
Within six months, the private equity firm made a successful acquisition in the large molecule lab testing space and appointed two of the candidates as Non-Executive Directors, and a third as the successor to the founding CEO. The private equity firm has since exited at 6x cost multiple. The CEO who was introduced by 3D CRO was appointed another CEO role within a separate portfolio company one year post sale of the initial investment.
