Preparation of company divestiture
Currently we see a buyer’s market: there are more companies offered than sought. This means that buyers can choose carefully. Buyers, both strategic and financial, are picky nowadays. They themselves are well aware of all the risks associated with an acquisition, mostly through (due diligence) investigation and try to exclude the contractual risks as much as possible.
As a result, the sales process is not always successful. Does that only have to do with critical buyers? In many processes, the companies offered are actually not ready for sale. The results fell short of projections, necessary investments have not been performed yet or management is not at full strength. In a tough economic market, the current situation often leads to lower price or even the ending of the sale process.
We see a thorough and timely preparation of a sale as a necessity to maximize feasibility and create best pricing. In our view, this preparation consists of careful analysis of the company, not only strengths, but also risks, opportunities and limitations. By means of this analysis, we can indicate how the risks can be reduced, for example, by strengthening management, by a wider spread of customers and suppliers or a better record of internal and external contracts
Simultaneously to this process we can work out the next steps in the divestiture process, with an assessment of possibly interested buyers, researching if an auction procedure is viable and analysing what information could strengthen the bargaining position.
This proper preparation will result in a faster and better final sales process. The investment required for the preparation will be earned back by a successful and faster sales process.