Integration and Divestiture Planning and Execution
After you make the deal, make it deliver
Companies that stayed on the deal-making sidelines during the downturn are finding new reasons to dive into M&A. For one thing, many companies find that their portfolios have fallen out of balance and are not correctly positioned for the upturn. And then there’s the estimated $2 trillion in cash that US businesses are sitting on after they spent the recession hunkered down and cutting costs. But when it comes to integration and divestiture, the M&A strategy is only part of the picture. Execution – actually realizing the value that led you to the table – is where shareholder value is created or destroyed.
Deloitte looks past process to the final impact each decision will have. We advise clients in the critical steps that bring a transaction from concept through execution. Learn more about the offering.
Divestiture of a captive and arranging an outsourcing agreement
Helping CoreLogic expand geographically.
Achieving cost efficiencies through global finance and accounting outsourcing
Helping one of the world’s largest passenger airlines identify cost saving opportunities through outsourcing strategies and implementation.
Are strategic alliances and joint ventures the new M&A?
Watch the Dbriefs webcast replay.
Divestitures and carve-outs: Becoming a prepared seller
Read the CFO insights.
How to prepare for a carve out
Read more of Jeffery Weirens' viewpoints in his article published in Business Finance.
M&A lies (And why they’re sometimes true)
The hidden tax value in divestitures
Why looking beyond the deal can pay off big.
Making the deal work series
Insights and ideas to improve M&A performance.
Merger & Acquisition library
One-stop for insight and advice
Seven secrets of highly successful divestitures
Meet our people
- Jeffery M. Weirens, Principal, Deloitte Consulting LLP
- Acquisition Strategy and Commercial Diligence
- Corporate and Business Unit Strategy
- Enterprise Cost Management
- Finance Integration and Divestiture
- G&A Cost Reduction
- Human Resources (HR) Integration and Divestiture
- Information Technology (IT) Integration and Divestiture
- Sales, Marketing and Customer Integration and Divestiture
Learn more about the offering
When the deal is done, you’re just getting started
From thousands of transactions we’ve identified that the majority of value creation or destruction happens after the deal is signed; simply getting a deal signed and closed isn’t enough. Day One and every day that follows, should deliver benefits that reflect the reasons you opted for the transaction in the first place. A successful transaction requires the development and execution of a credible, detailed plan that results in a seamless close (Day One) and a speedy path to value capture through a robust post-close 100-day plan. During a divestiture, success is being a prepared seller, minimizing or even eliminating transition services agreements (TSAs) and eliminating stranded costs. In both cases, it’s important to establish effective governance, maintain business continuity and preserve customer relationships.
Driving a deal effectively to value creation means identifying the right sequence of activities and milestones, then lining up the tools that will help you achieve them. A Day One plan is part of that solution, but so is a much broader program to reduce risk, capture value and provide continuity to both internal and external stakeholders. To develop and carry out that kind of plan takes deep experience and a broad array of knowledge and skills – which is exactly what our professionals bring to every task.
Deloitte looks past process to the final impact each decision will have. We advise clients in the critical steps that bring a transaction from concept through execution. Our integration and divestiture planning and management services include the following:
- M&A strategy, target screening and due diligence
- Operating model optimization and organization design
- Synergy targeting and realization
- Day One readiness and execution
- Communications, culture and change management
- Supply chain, suppliers, R&D and innovation acceleration
- Customer, sales, marketing and back office alignment
- Portfolio strategy assessment
- Buy-side and sell-side advisory support
- Carve-out financial statement development
- Organizational separation and re-alignment strategies
- Transition services agreement (TSA) optimization
- Day One and separation readiness
- Stranded cost identification and elimination
We also help our clients develop their own M&A capabilities and integration and divestiture playbooks so they realize not only one-time benefits, but sustainable improvement.
- Increasing shareholder value through rapid, effective transaction execution
- Reducing risk by enhancing business continuity
- Identifying quick wins that give a transaction early credibility
- Capturing revenue and cost synergies through careful analysis and dogged follow-through
- Enhancing discipline through content rich, knowledge-based program management
- Reducing disruption by focusing on people and change management
- Retaining customers and employees through rigorous execution of customized playbooks
- Improving cost structure by making sure SG&A details don’t fall between the cracks
Five ways to create more value now
Define the “after” picture. Whether you’re carving out or adding on, a defined end-state blueprint can help prevent organizational paralysis and an agreed-upon roadmap speeds progress.
Show results quickly. Promises are easy to make. Delivering on them shows you’ve got the situation under control while spreading confidence and maintaining business momentum and continuity.
Be precise. Whether you’re tracking merger synergies or maximizing proceeds from a divestiture, the benefits from a transaction are the reason for the transaction – so they’re too important to get lost in the shuffle. Be specific in setting targets, assigning responsibility for them and tracking the results.
Execute on Day One. Repeat. When the moment of truth comes, your plan is insurance against the unforeseen. When everyone knows what has to get done with interdependencies identified, tension and mistakes decrease. Leading practices show that carrying that same focus post-close through a series of 90 day execution waves helps drive success.
Don’t forget people. A transaction shakes the ground under people’s feet. If you’re losing sleep over this, imagine how the people without direct control are feeling. Tackle the issue head-on with two-way, honest communications that keep everyone informed and invested.
Integration and divestiture planning and management in action
- In the middle of the global credit crunch, a large financial services company needed to sell off multiple businesses to raise money and repay a government loan. The challenge was made greater by the company’s operating model and infrastructure, in which a large number of interdependent subsidiaries operated with significant autonomy, but used common corporate processes and systems. With Deloitte's help, the company was able to design and execute a program for handling numerous divestitures in rapid succession. Each resulted in an issue free Day One, an avoidance of stranded costs and smooth separation from all transition services agreements.
- A merger of two major, global pharmaceutical companies created a new global player, but the anticipated benefits couldn’t come about until the legacy companies’ operating models were brought into alignment. Deloitte used its integration blueprinting and Day One and Day Two detailed planning as part of a comprehensive integration strategy, which resulted in a rapid integration process with the deal’s synergies significantly exceeding the original target.
As used in this document, “Deloitte” means Deloitte & Touche LLP, which provides audit, assurance and risk management related services, Deloitte Consulting LLP, which provides strategy, operations, technology, systems, outsourcing and human capital consulting services, Deloitte Tax LLP, which provides tax services and Deloitte Financial Advisory Services (FAS), which provides financial advisory services. These entities are separate subsidiaries of Deloitte LLP. 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.