Businesses of all sizes, across all sectors, are looking closely at their business models and balance sheet strength – to ensure they maintain liquidity and remain resilient through this crisis. Divestments are an important lever companies are frequently using as part of their capital allocation frameworks as they look for sources of liquidity and opportunity.
Here are seven top tips for boards and management teams when assessing portfolios and embarking on divestment projects:
- Find the hidden value. Understand what’s dragging down performance but could be worth more to someone else.
- Prepare well. Use a rigorous and clear process.
- Facts, not perception. Understand the true contribution of each business and do so dispassionately.
- Minimise distraction. Assign a dedicated team.
- Keep a fresh approach. Don’t just manage the portfolio as a one-off exercise – things can change fast.
- Prioritise growth. Allow management to focus on what matters.
- Be brave. Unlocking value will require some tough decisions.
Find further information on diversture, from developing an exit strategy to enhancing the value of your retained business, on our dedicated page.