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How
can your company divest non-core business?
 Divesting
non-core business is usually a quite complex and long exercise.
Speed, no come-back from employees or clients, a cash deal
and no management problems are key factors that have to
be dealt with.
This
article discusses the following major issues in our approach:
Preparation
This
is a critical factor in a divestment process. The objective
is to:
- Define
and carve-out coherent and saleable entities. Split if
necessary.
- Explore
or manage MBO options and/or secure key management.
- Set-up
a project team that will include the key transferring
managers.
- Assign
clear responsibilities for co-ordinating the process where
operations in different countries are involved.
- Decide
on the best deal structure and initiate potential legal
and tax actions (sale of shares, assets, spin off etc.).
- Restate
financials to reflect the true contribution accruing to
the buyers (including trading with the former owners).
- Assess
future implications of the divestment on the Company's
operations and take appropriate actions.
- Prepare
a comprehensive Data-Room, review and index.
Implementation
Once
the preparation has been completed the proper implementation
phase can start, which includes:
Production of Information Documents for each of the businesses
to be divested.
Research for, and identification of likely buyers.
Comprehensive selection and pre-qualification of potential
buyers.
Separate market making for the discrete entities in a controlled
auction process.
Data room organization and management of pre-bid limited
Due Diligence phase.
Production of bidding instructions together with draft legal
documentation.
Assistance in the final negotiations through to the closing.
Deliverables
- Project
plan
- Valuation
- Qualified
target list
- Information
Document
- Professional
Presentation
- Due
Diligence index
- Bidding
Instructions
Timescale
 The
process usually takes between 6 and 9 months depending upon
availability of key personnel and excluding typical holiday
periods.
CIC's
process is designed to maintain momentum at all stages and
to optimize chances of success.
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