Divestiture of a Large Business Unit
See how BCG helped in the divestiture of a conglomerate's business unit, keeping its management involved throughout.
Globindco was a global industrial goods conglomerate, operating in two different business areas. Financial constraints restricted the client’s ability to grow its business in both segments. After a portfolio review conducted by BCG, the client decided to divest itself of the more cyclical segment and asked for support in the upcoming divestiture process.
BCG provided end-to-end support during the divestiture process. In particular, we helped the client to
maximize the sale value by minimizing the discount expected to be applied by potential investors
close deal within a short time frame in order to take advantage of high valuation levels in an industry boom
ensure a smooth transaction process and serve as a process accelerator by interacting with all participating stakeholders, such as investment banks
As an unbiased advisor, we assisted our client throughout all stages of the divestiture process.
Our first step was to conduct in-depth screening of the buyers' universe, formulating the strategic fit and the rationale of potential investors' interests.
The second step dealt with transaction management, including
creation of an investment teaser and informational memo based on deep business insights and the strategic outlook
preparation of management presentations with a focus on sparring and challenging for management rehearsals
coordination of site visits by preparing presentations and continuously challenging the client on critical issues and open questions
management of the Q&A phase and data room by defining a clear process to follow and providing proprietary process-management tools
Our final step, closing support, entailed
the execution of wrap-up meetings by preparing, challenging, and coaching the client's management team
an in-depth preparation of final negotiations by analyzing additional options for value creation for the final investor
The key result—and at the same time, the key success factor—of the project was the stringent and always forward-looking process management, which enabled the client to fulfill the pivotal project goal: maximizing the divestiture value within the short given time frame.
The success of the project was primarily attributed to
an open and trustful collaboration between the client's management and BCG, and the (not always easy) obligation to argue for our views
the stringent preparation of management presentations, the data room, and Q&A sessions
the in-depth preparation and individual coaching of every management team member
BCG was able to build an effective counterbalance of the investor's discounts and finally helped to reach a price realization approximately 5 percent above primary expectations. Market analysts ascribed this mainly to the
identification and analysis of additional buyer synergies
assessment of additional measures and projects not included in the client's mid-term planning
identification and selection of buy-and-build opportunities, providing a clear strategic roadmap for the buyer
The divestiture freed up the required cash resources to fund strategic projects in the remaining business segment, enabling the client to achieve competitive advantages and emerge as a strong and focused player in the new core business unit.