An Accelerated Approach to Carve-out and Divestment Success

Many organisations have gone down the merger and acquisition path many times. Indeed, they have probably become quite adept at the process, with rigorous management steps and in-house capabilities to match.

But What About Carving Out and Selling a Business?

Experienced sellers will tell you that business for sale is far often more complex than its acquisition.

In fact, it can come as quite a shock just how challenging it is to maintain transaction momentum while separating all the organisational, operational and technological entanglements. More critically, if the sale process starts to struggle with inevitable execution delays, then anxiety levels will also increase. This can potentially doom the entire sale process with political infighting, loss of critical talent and departure of key investors.

For a Successful Carve-out and Sale, It’s Vital to Have a Speedy and Confident Divestment Process.

Over the past 20 years, BTD has provided M&A, integration, divestiture and separation advisory, planning and execution services across dozens of transactions. While every divestment has its own unique set of challenges there are nonetheless just a few key precepts behind every successful sale.

Governance

A divestment is too complex to be managed in a decentralised manner. It requires intense, dedicated and focused management from the centre, with end-to-end alignment between the board of directors, the CEO, executive leadership, and steering committee. A well-defined governance structure will significantly mitigate operational and business risk for both the buyer and the seller.

Buyer Profile

The sale process should be tailored to fit the buyer profile, what they think and what they do. ‘Walk a mile in their shoes’; understand their profile, their plans for the acquisition and what barriers they would face. Take an outside-in mindset; ensure all divestment activities are about creating a future-ready business for the buyer.
In addition, do not underestimate the power of storytelling to control the sale agenda. While a sales process will invariably have documented facts and figures, it’s the overall narrative, anecdotes and individual stories that create meaning, grab interest and inspire confidence.

Leadership Team

A leadership team is a capstone to success. These are the people – leaders and followers, who make the ‘deal real’. They must embody an affirmative, living and breathing approach to motivating, directing and empowering others. Leading a divestment successfully is an experience-driven skill-set – the more you do the better you get. It’s therefore critical to have leadership that combines expertise, ‘battle scars’ and the gravitas to propel the sales process forward.

Business Agility

Business agility can make the biggest difference of all when it comes to a fast and confident sales process. Based on a set of very simple concepts it represents a powerful and different way of working.

For an accelerated sales process, trade-offs will inevitably need to be made around opportunity, value, speed and risk. The traditional approach is to use the organizational hierarchy and standard protocols to make arbitrated decisions.

However, an enlightened and agile alternative is to guide, empower and direct teams to decide and take action themselves through a simple and powerful set of guiding principles. These give people the room to manoeuvre together with the ability to rapidly respond to circumstances as they arise.

Carve-out & Sales Success

A fast and confident sales process will deliver a bigger premium, strengthen the balance sheet and generate additional shareholder value. It’s also a win for the buyer who gains with a smooth close, fast handover, plus the tools and vision to gain additional value.