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Disposal of a subsidiary, branch or activity

Your challenges 

You wish to dispose of all or part of a subsidiary, investment or activity and there are certain issues that need to be addressed, such as:

• What type of disposal should be considered: private sale, auction, sale to a financial investor or to an industry player, sale in cash or equity, etc?
• Which key factors determine the value of the company?
• How to identify the strengths and weaknesses of the entity to be sold?
• What level of information should be made available to prospective purchasers?
• How to maintain control of the disposal process when the executives of the company being sold are going to work for the purchaser?
• How to minimise the risk of post-disposal disputes and prepare to deal with potential contentious matters?
• How to arbitrate between sale price and representations and warranties?
• How to prevent due diligences from consuming management's day-to-day activities?

Our solutions 

Preliminary analyses

• Identification of disposal scenarios,
• Determining the scope of the disposal,
• Identification of major risks and potential obstacles,
• Preparing the project's schedule and the main phases of the disposal.

Analysis of historical performance

• Understanding profitability (sales mix, cost structure, etc),
• Analysis of debt leverage and working capital requirements,
• Analysis of existing and potential liabilities.

Review or preparation of a business plan

• Internal coherence of assumptions and model accuracy,
• Coherence in light of historical performance.

Valuation

• Analysis of the main constituents of the value of the disposed activity,
• Multi-criteria valuations,
• Identification of risks and opportunities for the prospective purchaser,
• Analysis of the cost of assets sold and the expected income.

Preparation and/or assistance with the data room

• Identification and compilation of necessary information,
• Definition of responsibilities and work organisation,
• Guiding the information made available to the purchasers,
• Preparation of the necessary briefs for negotiations and post-closing follow-up.

Assistance in negotiating the contract

• Analysis of offers,
• Assistance in the negotiation and drafting of financial clauses including price adjustments, responsibility for closing accounts, and warranties given and received.

Assistance in post-closing discussions

• Analysis of requested price adjustments and the representations and warranties brought into play,
• Preparation of financial counter-arguments as well as assistance in negotiations.

Vendor Due Diligence 

An analysis of historical performance

An estimate of normative profitability

A critical review of the business plan

A realistic identification of the investment opportunity's strengths and weaknesses