We just published our latest playbook – The Divestiture Playbook – a short ebook inspired by the excellent and insightful new book Divestitures by Wharton Professor Emilie R. Feldman. Emilie kindly shared our new publication on LinkedIn stating – “This is an excellent practical guide to divestitures”. We recommend reading Emilie’s book first!
In your own business context, divestiture could mean, a product, a division, a subsidiary, a regional center, or even a set of assets no longer required.
Our playbook asks a set of essential questions to help you decide whether a divestment makes sense. We recommend as part of your annual strategic review process (not the annual budget cycle) that
divestitures should be on the agenda. It’s healthy to consider if all of your businesses, whether homegrown or brought in by acquisition, are still relevant to your strategy. Can you be remarkable in
all of these businesses? Can you invest the time and energy required to scale them all and maintain a leading position in the marketplace? Develop a rationale for why the company is divesting of a particular
business unit or asset(s), what the company hopes to achieve from the divestiture, and how the divestiture fits into the company’s broader strategic plan.
We take you on a journey to assess the relevance of letting go, of pruning back your ambition in some areas. Again, returning to Emilie’s book, divestitures can create enormous value. “Investors respond much more favorably when companies divest than when they acquire. The excess shareholder returns to divestiture announcements surpass those of acquisition announcements, and the performance differential persists for up to 36 months after the completion of these transactions”.
Our roadmap covers the following:
- Strategy – Why divest?
- Choice – What type of divestiture is appropriate?
- Grooming – What actions are required to maximize value?
- Process – The covert controlled auction explained.
- Post divesture – Transition Services Agreements (TSAs).
- Communication strategy across all stakeholders.
I hope the playbook adds value to your thinking. A complimentary download is posted to our Insights page here.
The Portfolio Partnership provides a range of acquisition and divestment support services tailored to your business needs and team size. We seamlessly become an extension of your team and integrate at all levels to fulfill the potential of the business. We create a strategic plan together with our clients and design a set of actions aligned to that plan. It is fractional corporate development management through the lens of an operator. We are always ready for a conversation.