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Divestment
Services

Dr. Philipp Hofstetter


Partner Transaction Advisory
Tel. +41 58 792 15 06
philipp.hofstetter@ch.pwc.com

Divesting for Growth


Reflections on the potential divestment from an
underperforming and non-core business are an
integral element of strategic business planning.
Assessing when it is time to divest and then
carrying it off successfully is a demanding task,
equally complex to making an acquisition.
In order to achieve strategic and financial goals,
companies need a systematic approach for the
divestment process. PwC Divestment Services can
help ensure a successful exit which will enhance
shareholder value, emphasise core competencies,
improve profitability and ultimately strengthen
competitive performance.

Markus Koch
Partner
Business Restructuring Services
Tel. +41 58 792 15 68
markus.koch@ch.pwc.com

Frank Minder
Senior Manager Transaction Advisory
Tel. +41 58 792 14 57
frank.minder@ch.pwc.com

identify
assess
prepare
execute
disintegrate

How is globalisation changing corporate


development?
The international marketplace is dealing with unprecedented change as globalisation
drives increased capital flows. Companies can invest and divest in response to
favourable market opportunities, changing labour markets or differing regulatory
regimes due to market liberalisation.

We help companies face the key challenges


In any divestment process a structured approach will reap rewards both in terms of
maximising revenues and minimising costs. Typical challenges in divesting a business
and ways in which PwC can support are the following:
Key Challenges

Identify non-core/non-performing
businesses

Disintegrate

Acquire/Create

Corporate
Development
Dispose/
Realise Value

Integrate

Assess the divestment target


and the way forward (e.g. sale,
spin-off, IPO, alliance, restructuring,
wind down)

Understand and anticipate potential


buyers needs

Maximise value and liquidity

Phases

I. Strategic
Review

II. PreDivestment
Assessment

Why are companies maximising value on


divestments less than half of the time?1

Assess options considering related


risks and upside potential
Identify potential buyers
Assess and optimise tax
consequences

III. Preparation

IV. Execution

Market the business for sale


Negotiate with bidders
Input on share purchase agreements
Implement optimised tax structure
Manage wind-down

V. Disintegration

Co-ordinate transition and


separation activities
Negotiate purchase price adjustments
Eliminate remnant costs and liquidate
stranded assets

Divesting for growth not for survival

Few companies devote much effort to a solid divestment or exit strategy.

Companies that fail to proactively embrace divestment plans for non-core or underperforming businesses in the face of increased competition and declining margins
are likely to become uncompetitive.

There is a lack of focus on divestment strategies and a gap in market knowledge


about how to maximise the value opportunity of an exit.

Successfully divesting an under-performing/non-core asset will release the flow


cash supporting that business for development of other opportunities.

Only a small number of companies have a dedicated team of divestment experts.


Most businesses rely on line management to handle divestments alongside their
day-to-day operational responsibilities.
1

Handling post-closing matters

Conduct strategic review of the


business portfolio
Identify divestment targets and
available options

Prepare carve-out historical financials


and stand alone business plan
Conduct vendor due diligence
Develop separation/wind-down plan

The pace of the business lifecycle is increasing rapidly

Today, divestment activities are gaining momentum, mainly driven by the need
and urge to further focus on core competencies, but also due to liquidity and debt
repayment needs.

PwC Support

Source: PwC Divestment for Growth survey in 2004 in Europe, Asia Pacific, Africa and the Middle East

05CFR-CI-129

Information
www.pwc.ch/articles
Expert articles, interviews and
press releases

We assist your
Company to
divest for Growth

Publications
Where to find and order a
publication:
www.pwc.ch/publications

Events
Please find information on
current client events at:
www.pwc.ch/events

2007 PricewaterhouseCoopers AG/SA. PricewaterhouseCoopers refers to the Swiss firm of PricewaterhouseCoopers AG/SA and the other member
firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.