Getting straight to the heart of the matter, Gurpal Ahluwalia declares: “It can be pretty black and white – people get better or they die.” Ahluwalia, UK head of M&A at BDO, is not talking about M&A, or refinancing – he’s talking about his previous life in the operating theatre as a cardiothoracic surgeon.

In February, he succeeded Peter Hemington as BDO’s UK head of M&A. Hemington had led the team for a decade.

Ahluwalia joined BDO in 2018 from KPMG to head up the newly formed commercial due diligence and strategy function and grow it as a service line. Partner Jamie Austin, now head of private equity at BDO, was running BDO’s healthcare and life sciences team back then, and had decided that for the firm to do more strategy work, people with deep sector knowledge were needed. Ahluwalia’s expertise was in demand and so he joined the team, which had around eight core M&A practitioners at the time. 

Ahluwalia set about building the strategy team, as well as winning mandates. “The first piece of work I got under my belt was a private equity deal involving a multi-clinic facility, which I had to deliver on my own. It was fascinating,” he says. “The first year was about understanding the uniqueness of the proposition of deep industry strategic thinking alongside M&A. We raided the market for the best people, some of whom I knew, some I didn’t.”

In May this year, Graeme Hurst joined the transaction services team to lead on due diligence in the life sciences and pharma sector, moving from PwC, where he led regional pharma and healthcare transaction services. The BDO team now has around 30 people in healthcare and life sciences strategy, and M&A. “We have built one of the most respected healthcare mid-market advisory teams, which is an incredible achievement in five years, and it’s all down to the team, not just to me,” says Ahluwalia.

Doctor to adviser

So how did he start on this unusual career path? While at home as a boy, his father had a heart attack and Ahluwalia had to call an ambulance. “My dad was looked after by some really amazing cardiac specialists,” he reflects on the traumatic time. “At 12, I wanted to be doing that.”

He studied medicine at King’s College, London and moved into cardiothoracic surgery as planned. He qualified in 2002 and worked in units such as the Royal Brompton and St George’s hospitals in London, and the John Radcliffe hospital in Oxford. “I loved the hard work and, perhaps bizarrely, even sleeping in the hospital. I read avidly around my subject – I wanted complete mastery of it. I enjoyed operating – the technical bit of the surgery – the most. By moving around, which is unsettling for some, but normal, one gets to learn many different techniques and approaches from different surgeons. It enabled me to develop my own learning style – I was like a sponge.” 

So how did he move into the world of mid-market advisory? It started when he began writing papers on how management could influence healthcare outcomes, which were peer-reviewed. It was outside his traditional surgical realm and brought him into contact with advisers and researchers at McKinsey and BCG. 

He was offered a year’s posting working for BCG, which he took up. “Family and friends thought I was absolutely crackers,” he says, “but my plan was to do it for a year and return a more effective surgeon with a greater understanding of the bigger picture. Unfortunately – or fortunately – I enjoyed it so much I didn’t go back to my job as a surgeon.

“BCG were sophisticated in how they used people who had lots of industry experience. From day one I was working on pitches, doing more business development than a new joiner at BCG normally would.” He found himself working in Spain, the UAE and New York on “fascinating projects”. Naturally keen to learn as much as possible, he relished the challenge of working with “superbrains” at BCG and with their clients: “I could see the impact of my work and I was learning something new every day.”

On a new path

One of Ahluwalia’s first pitches was to a hospital group he’d worked at years earlier. And while winning work was one thing, he also needed credibility as a client-facing adviser in the sector – he was being fast-tracked on a massive learning curve. After a year, while still working with international clients, there was less travel: “I was doing big-scale strategy work with some commercial due diligence on deals.”

The commercial due diligence element increased, which he found the most interesting: “It was very fast-paced, dynamic and really relationship-driven work. There were lots of different subsectors within healthcare and life sciences that were involved in M&A.”

Strategy was BCG’s real focus, so when KPMG asked him to take a leadership role in its healthcare and life sciences team, Ahluwalia jumped at the chance.

He worked on big pharma deals all the way down to small entrepreneurial founder-owned business deals, focused largely on healthcare and life sciences. Many of the deals were international, even though there might be a UK headquarters. “A lot of the founder-owned businesses I worked with were looking for expansion into the US, clearly the largest healthcare market in the world. It’s a complex market to enter in many ways and very competitive, but if you can get a foothold, there’s a huge amount to go after.”

At KPMG, he was quickly moved up to director, due to his experience, his newly learned skill of project delivery and his ability to sell work. But KPMG began moving away from the mid-market and looking more at deals that the pharma giants were initiating. Ahluwalia wanted to go back to the mid-market and so in 2018 he joined BDO.

Learning from the best

Although he trained as a surgeon and not an ACA, this hasn’t hampered his progress in the advisory world. “I have had an unusual career path, but within my discipline of strategy and commercial due diligence, a professional qualification is not needed – although I do need to know what I’m talking about. The ACA is a fantastic professional qualification that gives financial discipline. My background is in the sector, but I have learned a lot from working with our advisers who are qualified accountants. If you bring ACAs together with experience such as mine in the right way, you get the best of both skills and bring diversity of thinking to the advice we provide for clients.”

BDO’s healthcare and life sciences, strategy and commercial due diligence team is made up of people from a diverse range of backgrounds, Ahluwalia points out, including advisers with PhDs in next-gen therapies, as well as people who have worked in contract manufacturing and pharmaceuticals. “I really champion those with different backgrounds because we benefit from looking at problems differently. The diversity of our backgrounds, I believe, makes us more innovative problem-solvers. Of course, we will still hire people with the ACA qualification, but we will be open-minded about hiring people from different backgrounds as well.”

The firm has a robust regional corporate finance team across many sectors, with strong leaders in each. Ahluwalia has brought in strategy and commercial and due diligence teams for the consumer and travel, industrial and TMT sectors. Areas of focus for recruitment include value creation services partners and enhancing sector capabilities. “We want to build capacity and functional knowledge. We’re still building sector expertise, in areas such as financial services. Individuals with strategic knowledge will help us advance.”

BDO is certainly not unusual in encouraging diversity of recruitment, of course, but his is a good example to attract diverse candidates. “I’m living proof of BDO’s diversity of thought agenda – I’m heading the business unit and I have a very different background.”

Market outlook

Despite the broader malaise in M&A, Ahluwalia says that he has seen “relative resilience” in healthcare and life sciences dealmaking. “With an ageing population, the need for more healthcare is a major driver. And the development of pharmaceuticals is key to our lives from a morbidity as well as a mortality point of view. There is an essential nature to what’s being done. Businesses have been really successful in growing, and they will continue to grow, in these huge markets. Therefore, the opportunity in the mid-market is really interesting as an inorganic or an organic growth opportunity – and private equity has been very quick to latch on to that.”

He says any reduction in deal flow in the sector is down to a mismatch in vendors’ and acquirers’ valuations, but “the best deals are still attracting high multiples. Some of the other deals that require more work have been pushed to the right. Over the course of the next year or two, some volume will come back.”

There are no more dramatic career moves on the horizon, he says. “For me, BDO has the right client base and right culture, and I was given the opportunity to start this function from scratch, under the umbrella of a big organisation. The lifeblood of our work is typically in the mid-market – businesses with from £10m to £300m of revenue or larger. So many of those businesses are founder-owned. I am constantly out in the market talking to founder-owners about their businesses, figuring out how they grow and succeed. They are so enthusiastic, and open to discussions about strategy and what comes next. That’s what I really enjoy.”