Adding method to managing an exit strategy
Weigh all your options
When a business cannot be fixed, funded, or sold, a wind down is necessary. Deloitte Turnaround & Restructuring’s (Deloitte T&R) Managed Exit practice works with clients to devise and implement the optimal strategy. Our proven methodology and experience help clients achieve successful wind downs. Explore how.
Exiting a business? Welcome aboard.
Every industry experiences periods of slow growth. Underperforming segments have pulled down the enterprise valuation of too many organizations. The question is, can you survive it?
Deloitte T&R’s Managed Exit practice helps multinational companies to act on underperforming and noncore areas of their respective business. In collaboration with multiple service lines and specialists across globally diverse jurisdictions, we work with our clients to develop an initial strategy, to conduct a thorough assessment, and to enact a favorable course of action.
But sometimes, a client’s only option is a wind down. When this proves optimal, we offer detailed planning and skilled implementation. Throughout a wind-down process, we focus on actionable plans with clear-cut roles and responsibilities.
How else Deloitte can help
We offer specialization across all functional areas of a managed exit, including but not limited to:
Reasons for a wind down
When companies have underperforming businesses that they are unable to or unwilling to sell, it may be necessary to reduce their footprint. This typically happens due to external factors, such as global economic events, geopolitical issues, pandemics, or detrimental trends like technological obsolescence.
Triggers may also appear internally, with labor issues and operational inefficiencies, among other factors. These internal triggers may prevent business strategy transformation, stagnate growth, or, in some cases, require filing for bankruptcy to resolve litigation and liabilities.
How it is done
Failure to achieve a wind down on time and under cost may disrupt a company’s remaining businesses and diminish shareholder value, casting the parent organization as an underperforming company. Whether legal, operational, or financial, end-to-end collaboration throughout the process is essential.
Deloitte T&R prioritizes hands-on operational and financial advisory services. We create a transparent working relationship with management teams, collaborating onsite wherever appropriate to protect critical assets and mitigate risk. Likewise, we value working closely with a client’s legal counsel on issues such as statutory compliance, identification of labor issues, and execution of IP transfer.
The wind-down process can be divided into seven steps:
- Initiation and planning: Establishes framework and governance for applicable activities
- Work plan preparation: Creates detailed plans to capture a holistic view of expected work
- Pre-Day 1 execution: Executes against the work plan and establishes accountability
- Readiness certification: Focuses on legal and regulatory preparation with minute-by-minute planning
- Wind-down execution: Completes cutover activities and achieves Day 1 operation of remaining business
- Wind-down monitoring: Checks smooth operation of the legacy business post-Day 1
- Legal closure execution: Plans for legal closure and obtaining tax and regulatory signoffs
Toward a tailored exit strategy
Depending on the rationale behind the decision, companies might wind down the entire business or only partial operations. Achieving a successful wind-down isn’t easy. So, we propose approaching it as an M&A divestiture. The guiding principles of the process are—defining the objectives, identifying critical issues and action plans, tracking project progress, managing stakeholder relationships, reducing costs, and monitoring internal controls.
Richard Infantino
