Golden rules for successful divestment in a downturn
1. Manage your portfolio – it enables sellers and buyers to mover quickly to take advantage of opportunities
2. Preparation makes a difference – vendors who prepare thoroughly before divestments receive higher returns
3. Communicate with bidder to maintaining confidence and, therefore, momentum and competitive tension
4. Think about who the potential bidders are and present the business for sale accordingly
5. Pursue multiple sale options so you can choose whichever seems most likely to deliver value
6. Construct good sale & purchase agreements and negotiate them better
7. Trade-off between time and value – a short timeframe business divestment may result in a lower value
8. Design an organized process and remain in control of the process and organization
9. Provide incentives for the buyer by researching and documenting potential operational improvements as well as synergies with the buyer’s business
10. Do not limit to financial or legal due diligence – while financial due diligence brings everything back to numbers (earnings, net debt, etc), other areas such as tax, commercial, operational, HR can often bring most value.
2. Preparation makes a difference – vendors who prepare thoroughly before divestments receive higher returns
3. Communicate with bidder to maintaining confidence and, therefore, momentum and competitive tension
4. Think about who the potential bidders are and present the business for sale accordingly
5. Pursue multiple sale options so you can choose whichever seems most likely to deliver value
6. Construct good sale & purchase agreements and negotiate them better
7. Trade-off between time and value – a short timeframe business divestment may result in a lower value
8. Design an organized process and remain in control of the process and organization
9. Provide incentives for the buyer by researching and documenting potential operational improvements as well as synergies with the buyer’s business
10. Do not limit to financial or legal due diligence – while financial due diligence brings everything back to numbers (earnings, net debt, etc), other areas such as tax, commercial, operational, HR can often bring most value.