What does it take to buy the right target and manage the integration so that the acquisition helps—and does not harm—profitability, operations and customer relationships?
Mark Peters, CFO of Bluesight, has plenty of advice forged from recent experience. Bluesight, a software provider to hospital pharmacies and health systems, has bought three companies in the past 15 months, rolling up assets in audit management, compliance and drug analytics.
In an interview, Peters shares what kind of M&A targets suit Bluesight. He also details the Alexandria, Va.-based company’s methodical approach to post-deal integration and ensuring the acquisition meets financial expectations.
With M&A activity playing a big role in shaping the healthcare landscape, what strategic considerations do you prioritize when evaluating potential targets?
M&A should accelerate a company’s core strengths, not divert focus. I adhere to the “profit from the core” philosophy, expanding from a company’s strongest capabilities rather than overextending into unfamiliar areas. I prioritize three critical factors pre-acquisition:
One: core fit and expansion potential. Does the acquisition strengthen our core business, improve customer value or expand adjacent spaces where we already have a competitive advantage? If an acquisition risks diluting our core focus, we reconsider it.
Two: financial and competitive durability. We assess revenue quality, looking at customer retention and margin sustainability. Can the target drive long-term profitability?
Three: integration feasibility and cultural fit. Even the best acquisitions can fail if they’re too difficult to integrate. We focus on operational and cultural alignment to ensure a less tumultuous combination. Cultural impact shouldn’t be overlooked; it’s important to “get people onto the boat” quickly.
For Bluesight’s January 2025 purchase of Protenus, we ensured the company complemented our core focus, empowering hospital and pharmacy operations, ensuring alignment in buyer profiles and expanding wallet share without diverting resources into unrelated ventures. A disciplined approach keeps us focused on further innovation in healthcare technology and providing new solutions that solve [client] pain points.
What strategies have you found most effective in ensuring financial and operational alignment after an acquisition? Can you share an example?
Post-acquisition, I break out the key goals into workstreams, being extremely clear on the workstream’s owner, timelines, budgets and end goals. Every acquisition has a thesis—the rationale behind its strategic fit. That could be market expansion, core competency enhancement, cost synergies, reduction in market confusion or a combination of those factors.
Financially, it is important to do three things:
- Preserve the acquired base. We try to meet acquired customers where they are, working to understand their circumstances and needs. That starts with documenting all contracts to assess risk and prioritize renewals, extensions and migrations to preferred terms. Very often, in the company being acquired, customer retention hasn’t had the focus it should; we can create value by making it a priority.
- Enhance the entire customer base. As we stabilize the acquired base, the next step is identifying cross-sell and upsell opportunities across the newly combined customer base and suite of solutions. I’d recommend setting up a matrix to identify the opportunities.
- Stick to the financial integration timeline. Integrate your financial systems as quickly as possible (if needed, bring in third parties to assist) and pay special attention to collections efforts. Where possible, align the respective organizations’ processes and quickly consolidate the accounting and finance teams’ efforts.
What about operationally?
We build a playbook for operational integration. We standardize reporting, align KPIs, reduce redundant services and software spend and focus on systems integration, especially in financial systems, CRM and customer engagement platforms.
We also work to maintain customer and cultural continuity. We engage employees and customers early to reinforce the commitment to continuity and long-term value creation.
In a recent acquisition integration, we encountered inconsistent customer contract structures, threatening financial and operational efficiency. Instead of trying a disruptive overhaul, we implemented a phased integration, maintaining existing structures while gradually transitioning to a unified model. That allowed us to protect our core revenue base while capturing long-term synergies and minimally disrupting customer relationships.
What role does the CFO play in aligning acquisitions with customer needs and long-term retention?
M&A should strengthen the customer experience, not just the balance sheet. As CFO, my role goes beyond financial due diligence to ensuring that acquisitions enhance our core value proposition. That means prioritizing core customer synergies—assessing whether an acquisition truly adds value for customers rather than creating complexity or confusion.
We also structure deals for sustainable growth, ensuring functionality, pricing models contracts and service integration enhance long-term customer retention.
Finally, a smooth transition is critical. Finance works closely with product, customer success and sales teams to prevent the integration from disrupting service levels. One of our core values is honoring the customer, and that principle is crucial to our integration strategy when pursuing new M&A opportunities.
