Finding the “Right Fit,” at Home and Abroad – Foreign and Domestic Buyer Trends
Divestiture Survey Report 2013: Sharpening your strategy
According to the survey, price once again leads the reasons for choosing a buyer by a wide margin, with 46 percent of responding executives calling it the most important factor and roughly three-quarters placing it in the top two. Fifty-four percent of surveyed executives ranked speed and certainty to close as one of their top two factors, but just 19 percent indicated it was the most important. The third most selected reason for choosing a buyer was good fit for management/employees, with 28 percent of respondents ranking it as the number one or two reason.
2012 showed big changes in who is buying U.S. assets, with a significant decline in domestic corporate buyers. Companies that look across borders and to private equity for potential buyers can increase their number of bids, which in turn, may increase their chances of getting the price they want.
Declining preference for domestic corporate and private equity buyers
In the survey, respondents indicated that domestic corporate buyers were more often preferred, but somewhat less than in the 2010 survey. Fifty-nine percent of surveyed executives indicated their companies prefer or somewhat prefer domestic corporate buyers compared to 70 percent in 2010. According to the survey, the other types of buyers that respondents favored were cross-border corporate (32 percent) and domestic private equity (31 percent). However, surveyed executives were less likely to prefer private equity buyers than they were in 2010. Only 31 percent of surveyed executives indicated their companies prefer or somewhat prefer domestic private equity buyers, compared to 42 percent in the 2010 survey. The declining preference for domestic corporate buyers among the companies surveyed is reflected in the actual deals in the marketplace.
Read more about our findings on buyer trends, potential obstacles in cross-border deals, and cross-border middle market deal trends in the Finding the “right fit,” at home and abroad – foreign and domestic buyer trends chapter in our Divestiture Survey Report 2013.
To continue learning about the key insights and findings from our Divestiture Survey Report 2013, access our results in the following ways:
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- Read online featured content from additional sections of our report:
- Economic uncertainty makes divestiture planning a challenge
- Strategic factors important in driving divestitures
- Raising the bar – receiving more value from your carve-out
- Shorten the waiting game – closing your deal
- Transition Services Agreements (TSAs) – planning now for post-close
- If at first you don’t succeed…consider putting your business back on the market
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