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How stranded costs can make or break success of divestitures
Tuesday, 13 May 2025 11:00 a.m. ET

Virtual - Dbrief

CPE credits | Event language: English

13 May 2025

Tuesday, 11:00 a.m. ET | 1 Hr.

How stranded costs can make or break success of divestitures

Learn more about

M&A and Restructuring

Participants will identify why divestitures may decrease profitability for the remaining organization and how to mitigate any stranded costs.

Key takeaways

Host: Joel Schlachtenhaufen, principal, Global M&A Leader, Deloitte Consulting LLP

Presenters:
Jason Caulfield, partner, Head of Separations and Divestments, Deloitte UK
Lucy Julian, partner, Value Creation Services, Deloitte UK
Ezrick Wiggins, principal, M&A and Restructuring, Deloitte Consulting LLP

1.0 Overview CPE credit | Specialized Knowledge

Divestitures can be a tool to streamline businesses weighed down by non-core assets. However, companies may see lower shareholder returns if they don't stay focused on their cost base when contemplating a divestiture. Our research shows divestitures can fail to improve near-term profit margins. In fact, 51% of companies that divested assets in the last two decades experienced a profitability drop greater than 3.3 percentage points after the first year1, we’ll discuss:

  • Possible impacts of divestitures on post-deal profitability
  • Complexities introduced through Transitional Service Agreements
  • Strategies to mitigate stranded costs

1 Capital IQ and Deloitte Analysis

Get in touch

Joel Schlachtenhaufen

Joel Schlachtenhaufen

Deloitte - United States
Joel is a principal in the Merger & Acquisition Consultative Services practice with Deloitte Consulting LLP. He has more than 20 years of professional experience, including significant experience advising and working with senior executives to drive shareholder value through the full lifecycle of M&A transactions. He has successfully led efforts in M&A strategy, transaction advisory and integration, and divestiture planning and execution across multiple industries.
Ezrick Wiggins

Ezrick Wiggins

Deloitte - United States
Ezrick is a principal in Deloitte’s M&A and Restructuring practice. He has extensive experience in all stages of the M&A lifecycle, including integration strategy, divestiture planning, synergy capture, program management, and due diligence. Ezrick focuses on M&A IT strategy, technology strategy and implementation, program management, cost restructuring, technology transformation, enterprise architecture, and NextGen M&A capabilities. He also has experience in IT restructuring and separation management, including stranded cost management and TSA development.