Businesses divest subsidiaries or product & service lines for various reasons.  Sometimes the divestment is non-core. In other cases there is a better use of the capital within the parent company.

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Divesting a subsidiary or business unit requires management of a wide and complex range of considerations. And there are some substantial differences between the process of divesting a business unit from within a larger entity as compared to the sale of a whole business or group of companies.  The corporate leader accountable for the divestment process needs to ensure that they have covered everything in order to maximise value and limit risk, including considerations such as:

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• Separating all the business assets and documentation for transfer to a new owner from your core business. Including the most important assets of all - customers & management.

• Determining value for a service or product line where the profitability & ROI measures of the divestment are greater than is apparent in the company accounts. Get this wrong and value could be left on the table.

• Structuring the transaction for maximum efficiency to ensure qualification of, for instance, substantial shareholders exemptions.

• Understanding & effectively negotiating the scope and price of a Transitionary Services Agreement.

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However, in other ways achieving a successful divestment at the best possible price depends on another thing Symmetry excel at for both divestments and whole business sales. Thorough preparation. Comprehensive acquirer research. Generating a competitive market and auction process. And negotiating excellent terms.

 

From setting out valuation drivers to negotiating Transitionary Services Agreements, Symmetry Corporate Finance's experience advising on divestments is at our clients' disposal.

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Call us today for a free, no obligation consultation to assure the success of your divestment project.

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