If you’re not looking to sell your entire business, you probably haven’t given much thought to divestiture. But if you want to raise cash to reinvest in other areas of your business or create a capital event for shareholders, selling just a part of it can make perfect sense.
This partial sale of a business is known as a carve-out.
Why divest a non-core asset?
Most businesses divest assets to generate cash, which they then invest in other areas of the business that offer greater excitement or opportunity.
A structured and carefully planned divestiture can generate significant capital, and allow you to:
- change your strategy or focus;
- streamline your operations and free up more time for management; and
- create a capital event for shareholders.
If you’re thinking about any of these things, it’s worth identifying assets you may be willing to sell.
Types of non-core asset you could divest
Non-core assets can come in various shapes and sizes and in many organisations, entire subsidiaries or legal entities can be carved out and sold. We regularly advise on these types of divestitures, and also on the carve-out and sale of:
- operations in certain geographies;
- specific divisions and products; and
- discrete teams and functions.
You may have an asset in mind that you could divest, but how do you know when to sell?
Why is now a good time to divest?
Despite the ongoing challenges caused by the coronavirus pandemic, now is actually a great time to consider a divestiture for two main reasons:
- Businesses with strong balance sheets are looking to make opportunistic acquisitions – especially those that are backed by private equity.
- Private equity has significant dry powder to spend and certain investors focus specifically on carve-out opportunities.
Whichever type of buyer you attract, our specialists can help you prepare your asset for sale and maximise its value.
Our full service solution
Why choose us?
Our fully integrated specialist Divestiture Advisory team has extensive carve-out experience and has advised clients ranging from FTSE100 companies to entrepreneurial owner-managed businesses.
In H1 2020, we were the most active mergers and acquisitions adviser in the UK according to Experian, giving our team deep experience with, and understanding of, your potential buyers. This experience and knowledge allow us to focus on tailoring the sale preparation for specific buyers to help minimise delays and risks, and to focus on maximising value for you throughout the entire transaction life cycle.