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Raising the Bar – Receiving More Value from Your Carve-out

Divestiture Survey Report 2013: Sharpening your strategy

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Although strategic, rather than financial, factors are considered the most important drivers in the survey, companies remain intent on achieving the expected value, and an impressive 85 percent of sellers reported being satisfied with the value of their most recent divestiture. Sixty-eight percent of surveyed executives reported receiving the value they expected, while 17 percent walked away with a price that exceeded expectations. 

In Deloitte's experience, sellers are now focusing more on preparation than they have in the past. However, sellers also want faster deal closure. Shortening the gap between putting an asset on the market and closing the deal often means less time for diligence. To adjust for this change in deal mechanics, sellers should develop a detailed separation plan: mobilizing resources around the deal execution and transition and preparing themselves to support the buyer’s diligence needs and mitigate the operational challenges that the buyer will likely face in closing the deal.  

Increasing the number of bidders for increased value 

Forty-five percent of surveyed executives at the companies that received less value than expected for their last deal indicated a limited number of bidders was an important factor. The fact that the number of surveyed bidders was chosen by nearly one-half of both those receiving more value and less value than expected reinforces Deloitte’s experience that sellers who want to increase sales price should avoid single-bidder, exclusive deals. While these deals can be attractive for reasons other than price, multiple bidders can increase the seller’s leverage for improved terms overall. Additionally, a well-run auction, with proper levels of preparation by the seller, can actually be more timely than a single-bidder, exclusive deal, due to the competitive nature of the process.. 

Read more about our findings and insights around divestiture deal values in our Raising the bar – receiving more value from your carve-out chapter in our Divestiture Survey Report 2013

Dig deeper 

To continue learning about the key insights and findings from our Divestiture Survey Report 2013, access our results in the following ways: 

 

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Deloitte Corporate Finance LLC ("DCF"), member FINRA, is a wholly owned subsidiary of Deloitte Financial Advisory Services LLP ("Deloitte FAS"). Deloitte FAS is a subsidiary of Deloitte LLP. Investment banking products and services within the United States are offered exclusively through DCF.

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