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 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.
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.
- Project plan
- Valuation
- Qualified target list
- Information Document
- Professional Presentation
- Due Diligence index
- Bidding Instructions
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.
