A well planned and executed divestiture is designed to achieve maximum transaction value and minimize transaction risks. The divestiture process is comprised of strategy, preparation, documentation, marketing, negotiating, due diligence and closing.
Setting the divestiture strategy involves a clear understanding of client objectives, establishing a range of expected market values, reviewing potential strategic and financial buyer targets and identifying internal and external divestiture team members.
Preparation is comprised of a thorough review of company operations and the industry to identify strengths, risks and opportunities. Company strengths and opportunities are identified for marketing to potential buyers and risks are reviewed to identify mitigating factors and potential pre-sale operational changes. The tax structure is also reviewed to determine the optimal sale structure and recommended pre-sale tax transactions.
Documentation includes preparation of a confidentiality agreement (CA), summary fact sheet (Teaser), confidential information memorandum (CIM). The CA provides legal protection against unauthorized use of confidential information and non-solicitation of employees and customers. The Teaser is used to pre-qualify target buyer interest while maintaining maximum confidentiality. The CIM is the primary marketing and information document issued to qualified buyers.