When it comes to selling a business, a successful strategy requires active portfolio management and a well-planned divestment process.
Active portfolio management by large listed and privately-owned companies is increasing. The current economic climate, disruption to traditional business models, intervention by activist investors and the emergence of specialist private equity investors all play a role. Shareholder value is maximised with active portfolio management; focusing the right resources (both capital and human) into the right areas. This includes a clear, focussed strategy extracting maximum value from any businesses which do not fit.
In the current environment, for a lot of companies, actively managing their portfolio will result in identifying, assessing and exiting non-core assets to generate cash to strengthen balance sheets, pay down debt, invest in core activities or enhance shareholder value.
There is intense competition for capital (particularly due to liquidity constraints resulting from the COVID-19 crisis) and increasing scrutiny over its best use by analysts and shareholders. This in turn increases the pressure on Boards to minimise complexity, reshape their operational footprint and operating models to prepare for a new reality. They are forced to challenge where businesses, operations or service offerings do not fit, and to unlock value by either fixing, exiting or closing these businesses.
Therefore, for a lot of companies these non-core disposal programmes are more than just a short-term release of cash. They are under pinned by broader strategic thinking on reshaping and repositioning their portfolios. This can include investing in the core business for sustainable growth in the new reality by adapting to new demand/supply dynamics, technological transformation and setting renewed ESG targets.
The COVID-19 crisis has accelerated, or in some cases forced, companies to rethink strategic priorities leading to identifying non-core assets which they do not see being part of their business in the longer term. However, what is non-core for one owner can be hugely attractive and valuable to another as part of their portfolio.
Our experts are forward-looking specialists with a broad range of skills and deep industry expertise. From helping you assess a divestment to minimising value leakage, we take time to understand your needs and overall situation. This allows us to gain maximum sale price and execute the deal with minimal disruption.
Our vast experience provides us foresight that lets you act decisively and confidently. Our sell-side experts help you focus on key questions through the critical stages in planning and executing divestments.
When it comes to selling a business, each decision counts. Our integrated team of sell-side specialists can guide you every step of the way.
To secure the best value for a divestment, there’s lots you need to know. You need an objective view of your company, a nuanced understanding of current market conditions and the agendas of the buyers seated across you. As an objective third-party advisor, we can support you through every phase of the lifecycle. We help you identify potential buyers and create a competitive bidding environment. We can also assist you to enhance the value of your retained business.
KPMG’s global report offers detailed analysis of 45 public capital market carve-outs across the US, Europe, UK and Australia over the last five years.
KPMG’s global report offers detailed analysis of 45 public capital market carve-outs.
Graham Armitage discusses the impact for buyers and sellers as they are confronted with new deal issues.
Graham Armitage discusses the impact for buyers and sellers as they are confronted with ne