to Pay for Technology
“KR’s work helped expand our portfolio company’s
value proposition in the eyes of its partner and close a
very favorable deal for investors.”
The potential partner saw the better molecule-manufacturing technology of KR's client as a COGS-reduction play only, so its willingness to pay was limited, and negotiations progress was slow. KR's independent analysis showed that the value proposition from a partner perspective should be much broader: reduced capital costs and financing needs, shorter planning lead times resulting in better matching of supply capabilities with customer demand, greater product purity, and reduced environmental effects compared to alternative manufacturing processes. The potential partner, one of the ten largest biopharmaceutical companies, had a complex organizational structure. KR helped its client determine who might be the best people in the partner organization to understand various aspects of the value proposition, how to make the value proposition clear, and how to bring it all together in terms of appropriate deal terms for KR's client. Three months later, a deal was signed that was highly favorable to KR's client. By industry standards, this deal was a standout in the amount of value awarded to a technology platform company.