M&A: Ohmeda and Midaxo | Kaija Katariina Erkkilä | Negotiator 103

Summary

Host and guest worked opposite ends of the same billion-dollar transaction. In 1998 Miettinen was a Credit Suisse First Boston associate on Project Autumn, the $1,050 million three-way carve-up of Ohmeda between Instrumentarium’s Datex, Baxter and Becton Dickinson; Erkkilä was inside Datex dividing units and people before signing and then running the integration that took the company from 1,200 to 3,500 employees. Twenty-three years later she is the co-founder and largest individual owner of Midaxo, the SaaS platform built precisely because the knowledge from an integration like that one stays trapped on individual laptops. The episode moves from the deal room to the platform, and closes on the argument that due diligence is the wrong place to start.

What is discussed

• Two sides of the same deal. Erkkilä was inside Datex; Miettinen was the Credit Suisse First Boston associate on the other end of it. Neither knew much about what the other was doing at the time.
• Project Autumn. Ohmeda was bought for $1,050 million and split three ways: Datex took the anaesthesia machinery, Baxter the related gas business, Becton Dickinson the supplies — the last roughly the same size as Datex’s share.
• How the deal was won. A bidding contest against Thermo Electron, which had the billion and the aggression to take the whole company. Miettinen recounts Sami Erviö’s recollection of Clateo Castellini wanting to cancel and the team walking out of the meeting — and CEO Olli Riikkala insisting on returning out of politeness, at which point BOC told them they had won.
• The communication technology of 1998. Voice messages between Helsinki, New York and London, listened to each morning in some terror about what would need doing.
• Dividing a company before you own it. Ohmeda had just merged all its departments into one monster entity, so the three buyers had to split units, managers and staff before signing. Baxter’s production was clean; the rest took work. On Miettinen’s side it became an enormous spreadsheet of split costs and pro formas.
• Scale. The Ohmeda share Datex received was twice Datex’s own turnover: 1,200 people became 3,700, then 3,500 after 200 were let go.
• An HR function of two. Datex had one person hiring for production and one handling contracts. Ohmeda had four HR departments in America with ten people each and a French HR head who was also deputy CEO. Erkkilä, with no HR background, was handed the problem and built a global organisation in a year.
• The poison pill that failed. Spacelabs and neonatal incubators were bought partly so that General Electric could not afford the company. GE bought it anyway once the dollar was strong and the valuation dipped.
• The culture actually moved. Datex was a third of the combined company, but Erkkilä’s account is that its innovative culture gradually seeped into Ohmeda — she was at a Datex alumni gathering the day before recording.
• Why Midaxo exists. Consulting on integrations after Datex-Ohmeda, Erkkilä kept meeting companies she had helped years earlier whose knowledge was locked on private laptops and in spreadsheets, with the people moved on. She had already written books on integration — including the M&A Coach — and the platform came from meeting Kalle Kilpi of Aspida, where she was an investor and board member.
• Three or four years of being told nobody would buy it. Acquisition data was considered too sensitive for the cloud. Adoption came from the US first, then from serial acquirers whose 40-page security questionnaires pushed Midaxo into standardised, repeatedly audited processes.
• What the platform does. The buyer models their own process, stage by stage; cases move between boxes; company basics are pulled in automatically; files, meeting notes and contacts sit with the case; a Gantt view allocates diligence and integration tasks against a critical path; and permissions determine who sees what.
• Measured results. Hewlett Packard Enterprise, a client since 2015, improved its due diligence process by 50 %; Philips improved integration by 40 % — which Erkkilä attributes to repetition plus the change management, not to the tool alone.
• Data rooms are a different animal. VDRs are diligence tools and CRMs are people tools; both are single features of a wider project. She notes VDRs are increasingly used buyer-side, so that if the deal completes, the negotiation record passes to the integration team.
• The structural failure. The M&A manager closes the deal and is usually not responsible for integration — one or two people per company — and running diligence and integration with different teams is, as Miettinen puts it, rather silly. It is starting to change.
• Where AI stops. It already reads and analyses the documents. It cannot judge management processes, decision-making, culture, or what the net value being pursued actually is.
• Must Win Battles for integration. Erkkilä’s proposal, borrowed from IMD: before starting integration, take the key people from both sides away for a couple of days, go through the target’s history and decision processes and the buyer’s actual rationale, and build a shared model — because most integrations begin without ever establishing one.
• Deciding what not to do. Datex-Ohmeda knew Ohmeda’s logistics were complicated and expensive, left them alone deliberately, and told everyone why.
• ‘Nobody ever asked us.’ Her favourite story: a company bought two years earlier, asked about how something had been handled, and the answer was that no one had asked. With a genuinely shared goal, people volunteer what matters without being asked.
• Covid changed the mode permanently. Deals stopped in spring 2020 and picked up from Q4; Miettinen’s Finland–US transaction had budget for one flight to New York and one to London and did everything else on Zoom, Teams and VDRs — good practice for the year that followed. Both agree meeting once in person still matters, especially in integration.
• Start from value. Erkkilä’s closing argument: she would not start from due diligence at all. Asked directly why they made an acquisition, management often cannot answer beyond ‘growth’. Model the value, model the options and scenarios — and give cultural due diligence the attention it does not currently get.

Watch

The recording lives on the Neuvottelija channel: Yrityskaupat Ohmeda ja Midaxo | Kaija Katariina Erkkilä | Neuvottelija 103. A Finnish edition of this episode is published at www.neuvottelija.fi.