[Link].
ch
Divestment
Services
Dr. Philipp Hofstetter
Partner Transaction Advisory
Tel. +41 58 792 15 06
[Link]@[Link]
Divesting for Growth
Reflections on the potential divestment from an
underperforming and non-core business are an
integral element of strategic business planning.
Assessing when it is time to divest and then
carrying it off successfully is a demanding task,
equally complex to making an acquisition.
In order to achieve strategic and financial goals,
companies need a systematic approach for the
divestment process. PwC Divestment Services can
help ensure a successful exit which will enhance
shareholder value, emphasise core competencies,
improve profitability and ultimately strengthen
competitive performance.
Markus Koch
Partner
Business Restructuring Services
Tel. +41 58 792 15 68
[Link]@[Link]
Frank Minder
Senior Manager Transaction Advisory
Tel. +41 58 792 14 57
[Link]@[Link]
identify
assess
prepare
execute
disintegrate
How is globalisation changing corporate
development?
The international marketplace is dealing with unprecedented change as globalisation
drives increased capital flows. Companies can invest and divest in response to
favourable market opportunities, changing labour markets or differing regulatory
regimes due to market liberalisation.
We help companies face the key challenges
In any divestment process a structured approach will reap rewards both in terms of
maximising revenues and minimising costs. Typical challenges in divesting a business
and ways in which PwC can support are the following:
Key Challenges
Identify non-core/non-performing
businesses
Disintegrate
Acquire/Create
Corporate
Development
Dispose/
Realise Value
Integrate
Assess the divestment target
and the way forward (e.g. sale,
spin-off, IPO, alliance, restructuring,
wind down)
Understand and anticipate potential
buyers needs
Maximise value and liquidity
Phases
I. Strategic
Review
II. PreDivestment
Assessment
Why are companies maximising value on
divestments less than half of the time?1
Assess options considering related
risks and upside potential
Identify potential buyers
Assess and optimise tax
consequences
III. Preparation
IV. Execution
Market the business for sale
Negotiate with bidders
Input on share purchase agreements
Implement optimised tax structure
Manage wind-down
V. Disintegration
Co-ordinate transition and
separation activities
Negotiate purchase price adjustments
Eliminate remnant costs and liquidate
stranded assets
Divesting for growth not for survival
Few companies devote much effort to a solid divestment or exit strategy.
Companies that fail to proactively embrace divestment plans for non-core or underperforming businesses in the face of increased competition and declining margins
are likely to become uncompetitive.
There is a lack of focus on divestment strategies and a gap in market knowledge
about how to maximise the value opportunity of an exit.
Successfully divesting an under-performing/non-core asset will release the flow
cash supporting that business for development of other opportunities.
Only a small number of companies have a dedicated team of divestment experts.
Most businesses rely on line management to handle divestments alongside their
day-to-day operational responsibilities.
1
Handling post-closing matters
Conduct strategic review of the
business portfolio
Identify divestment targets and
available options
Prepare carve-out historical financials
and stand alone business plan
Conduct vendor due diligence
Develop separation/wind-down plan
The pace of the business lifecycle is increasing rapidly
Today, divestment activities are gaining momentum, mainly driven by the need
and urge to further focus on core competencies, but also due to liquidity and debt
repayment needs.
PwC Support
Source: PwC Divestment for Growth survey in 2004 in Europe, Asia Pacific, Africa and the Middle East
05CFR-CI-129
Information
[Link]/articles
Expert articles, interviews and
press releases
We assist your
Company to
divest for Growth
Publications
Where to find and order a
publication:
[Link]/publications
Events
Please find information on
current client events at:
[Link]/events
2007 PricewaterhouseCoopers AG/SA. PricewaterhouseCoopers refers to the Swiss firm of PricewaterhouseCoopers AG/SA and the other member
firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
