Mastering Serial Divestitures: Strategies For Maximizing Shareholder Value.pdf

us-deloitte-5_ways_to_master_serial_divestitures_040516.pdf
Preview of Mastering Serial Divestitures: Strategies for Maximizing Shareholder Value
🔗 Source: www2.deloitte.com
📊 Size: 2.08 MB
📄 Pages: 8 pages
⬇️ Downloads: 268

Summary

Market conditions favor sellers due to high corporate cash reserves, uninvested private equity capital, and increasing transaction multiples, creating a favorable climate for shedding underperforming or noncore assets. Divestiture activity is at record levels, with companies executing multiple divestitures in rapid succession (serial) or simultaneously (parallel). Despite the potential for significant shareholder value increase through divestitures, many transactions deliver only expected or lower-than-expected value.

Deloitte highlights key success factors in serial/parallel programs: sequencing and accelerating deals, restructuring and value capture, establishing a scalable operating model, developing and retaining talent, and building a repeatable play. These elements help balance the risks of multiyear endeavors with significant value creation opportunities.

Sequencing and timing are crucial for planning serial/parallel programs. Deal planning teams must maintain open communication channels to manage deal flow and business complexities affecting close timing. Considerations include maximizing deal value, sequencing by deal size, piloting smaller-scale transitions, buyer sophistication, and seller diligence. Serial/parallel divestitures combine challenges of both sprint (quick transactions) and marathon (long-term single transaction) divestitures, requiring developed methods, trained resources, and adaptable governance to avoid organizational paralysis.

As businesses undergo multiple transactions, residual operations should be adjusted to support the remaining business while maintaining flexibility for future transactions. Planning the structure of RemainCo is essential post-divestiture.

Description

Market conditions favor sellers due to high corporate cash reserves and increasing transaction multiples, creating a favorable climate for divesting underperforming or noncore assets. Divestiture activity is at record levels, with companies increasingly executing multiple divestitures in rapid succession (serial) or simultaneously (parallel), aiming to significantly increase shareholder value. However, the potential for value creation could be higher, as indicated by a recent Deloitte survey.

Technical Information

  • File Format: PDF
  • File Size: 2.08 MB
  • Pages: 8
  • Language: EN
  • Total Downloads: 268
  • Last Updated: 17 hours ago

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