Delivering the Deal
Creating Divestiture Deal Value — Tales from the Sell and Buy Side
August 28, 2024 | 21 | 18:38
The “Delivering the Deal” spotlight series is where Mercer’s leading experts discuss the most pressing issues facing business leaders and deal professionals in M&A today.
What are the key factors that drive organisations to initiate divestitures and carve-outs? In this episode, join host Jeff Black who is joined by M&A experts across MMC — Scott Brady, Managing Director, PEMA Leader at Marsh, Bernd Oehring, Lead of Corporate M&A and Carve-outs, Oliver Wyman, and Chuck Moritt, Global Carve-out and Stand-up Speciality Leader at Mercer.
They’ll explore the triggers, considerations, and challenges involved in creating divestiture deal value in this episode. They’ll also provide valuable insights for business leaders and deal professionals navigating the intricacies of executing divestiture deals.
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Steps to success
The success of a divestiture deal depends on several factors, including the triggers that lead organisations to initiate divestitures, the market elements impacting the ability to find a suitable buy-side partner, and the key activities that need to be pursued throughout the deal lifecycle. -
Value creation
The period after the deal is closed and stabilised is crucial for realising the envisioned value. Performing the necessary work discussed in the earlier stages and addressing any disconnects can significantly impact the success of the divestiture and the creation of value. -
Maximising benefits
One key objective is to maximise the price received for the asset or the business being sold, and so to have clarity around what is in the perimeter of the deal. How entangled the business may be within the parent company, and what's going to be required to be clear to the buyer community about what is for sale. How the seller will support them, and what the expectations are moving forward is also a critical sell side factor. -
Creating alignment
Most of the disenergies that we've encountered in our business stem from carveouts. When we talk about optimisation and leveraging the economic mode, the reality is, the first thing we need to do is level set with all parties involved as to the aggregate economics of what we're talking about here. It is difficult to break up an organisation and find economics on the other side of it. So the first thing we need to do is level set, and secondly, execute on that revised model. And that is a very, very big part of what has to happen in the first 30, 60, 90 days.
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