5 ways to deal with separation anxiety

September 8, 2016


By Paul Hollinger, Barrett Shipman, and Colin Wittmer

PwC NYC Technology-41With divestitures emerging as an increasingly attractive way to potentially optimize a business portfolio or even fend off an activist shareholder campaign, what can you do to ensure your separation goes smoothly? If you are looking to dispose of assets, there are 5 areas to keep in mind to help align buyers and sellers. Following these guidelines can accelerate transaction timelines and enhance value for both parties while offering more clarity around key transaction elements.

1. Get centered: Establish a?Divestiture Management Office (DMO) – the place from which all communications, activity and resource coordination, and overall approach will emanate. It speeds response to issues and overall decision making, ensures consistency across workstreams and keeps things balanced and on track.

2. To Be or Not to be: Develop the Target Operating Model (TOM), which defines the “to be” state of the parent and carve-out business throughout the process. To create the TOM, all parties must focus on core infrastructure elements like how employees and processes will be impacted, which IT and data systems will be affected and how and when to separate physical assets and facilities. It’s the roadmap to getting where everyone wants to go.

3. TSAs: Transitional service agreements (TSAs)?clearly define the services the seller will provide after the transaction closes to keep operations running until the carve-out business is fully integrated or standing on its own. From a faster close and smoother transition, to reductions in both cost and risk, TSAs benefit both buyers and sellers.

4. Build a financial model: For quicker alignment between seller and buyer, it’s critical to?establish a strong Financial Model that takes into account not only GAAP and deal information, but also costs specific to these kinds of transactions. And, the seller gains a better understanding of stranded costs after the TSAs are finalized, as well as any other accounting implications associated with post-separation restructuring.??

5. Be transparent: Having a plan in place that includes both change management and communication to key stakeholders is crucial.?Getting the right messaging to both those who are part of the business being sold and those who remain behind, as well as vendors, suppliers and customers, can pave the way for a smoother transition.?

These?5 components?help sellers think like buyers, while still bringing their perspective to the table. Buyers will appreciate agile, informed and prepared sellers who have clearly considered the risks, as well as the value. The preparation and alignment around these factors will facilitate an easier, speedier and successful transaction.?

Visit our website?for more information and perspectives on completing a successful divestiture.


Contacts

Colin Wittmer

Deals Leader, PwC US Email

Curt Moldenhauer

Deals Solutions Leader, PwC US Tel: +1 (408) 817 5726 Email: curt.moldenhauer@pwc.com

河南快三 临海市 湖北省 钟祥市 大同市 兰溪市 湘潭市 松滋市 铁力市 彭州市 厦门市 宜春市 邹城市 彭州市 山东省 金昌市 平度市 海南省 双滦区 忻州市 葫芦岛市 十堰市 平度市 潞城市 临沂市 阜新市 普兰店市 汉川市 兴城市 都匀市 枣庄市 安达市 烟台市 高邮市 梅河口市 江油市 白银市 丰城市 孝义市 石首市 池州市 葫芦岛市 福建省 金华市 梅河口市 胶州市 上虞市 大石桥市 江阴市 吉首市 大庆市 铁力市 深州市 山西省 厦门市 项城市 永州市 原平市 明光市 耒阳市