Successful Divesting

Originally Published September 1999

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Richard S. Cohen

Those selling a business, division, or product line often do not conduct the planning necessary to make the process efficient, minimize disruptions to ongoing operations, and obtain the best transaction terms. Executives and managers are often enmeshed in day-to-day business affairs, struggling to get new accounts, improve manufacturing efficiency, convert new technologies into finished products, speed up order delivery, and resolve organizational issues. With so much on their daily business agenda, optimizing the divestiture process can easily be put on the back burner.

But failure to carefully plan for a divestiture may mean the difference between a successful transaction and a disappointing or even damaging outcome. Although a divestiture may appear to be a straightforward transaction, the process is always time-consuming, distracting, and complex, and it involves operating, strategic, financial, accounting, tax, personnel, and personality issues.