Professional Documents
Culture Documents
CORPORATE DIVESTITURE
Divestiture
Involuntary
Voluntary
Underperf orming
Underpositi oned
Strategy misfit
Bought in pack
Involvement of corporate development team in divestitures Frequency of evaluating portfolio for potential divestitures Adequacy of resources devoted to executing divestitures
Make sure that all the stakeholders are aligned; Create a plan for how the divestiture will happen, function by function; Do due diligence on yourself;
Savvy leaders view divestiture as an essential core competency of an organization and embrace its role in portofolio optimization
MBO
Management buyout
MBI
Management buyin
BIMBO
Buyin management buyout
PTP
Going private buyouts
Club Deals
Several PE firm form a consortium
Whether the incumbent management of the target of the buyout is part of the team initiating buyout and invests in the equity of NEWCO Whether the target firm is a company listed on a stock exchange and includes the public, both institutional and individual, investors as shareholders Whether the management team consists of incumbent target management or it includes new managers from outside or a mixture of both.
(i)
(ii)
(iii)
This means: Low R&D level -> High R&D level Low risk business -> High risk business
Organizational context relevant Acquisition process starts with an idea Progresses through acquisition justification.
Over Optimism
Directors can institutionalize a devils advocate whose function is make a serious case as to why the deal should not be done.
Cost savings
Revenue enhancement New growth opportunities Consolidation in fragmented industries: Add-on or bolt-on acquisition Platform acquisition or leveraged build-up Buy-build-operate (BBO) Buy-build-sell (BBS)
IPO roll-up
THANK YOU