Corporate Divestitures

William J. Gole, MBA, CPA has many years of M&A experience, managing numerous corporate divestitures from initiation to contract and close. Mr. Gole has held a wide variety of operational, financial, and strategic positions throughout his career. Most recently he was Senior Vice President, Planning and Business Development, with Thomson Healthcare where he had responsibility for strategic planning and the management and coordination of corporate acquisition and divestiture activity.  Paul Hilger, CPA has over twenty-five years of financial leadership experience, and has led numerous acquisitions and divestitures from planning through integration. Most recently he was Executive Vice President and Chief Financial Officer of Thomson Healthcare, a division of the Thomson Corporation. Prior to Thomson he served in a number of financial management roles with the McGraw-Hill Companies.

• PREFACE XIACKNOWLEDGMENTS XVCHAPTER 1 INTRODUCTION 11.1 Overview 21.2 Characteristics of Corporate Divestitures 31.3 Transaction Model 101.4 Staffi ng Model 151.5 Enabling Principles 231.6 How This Guide Can Help 27Key Points 30Appendix 1A Divestiture Activity by Standard Industrial Classification: 2002 to 2006 32Appendix 1B Aggressive Divesters: 2005 and 2006 33CHAPTER 2 STRATEGIC ASSESSMENT 342.1 Overview 352.2 Strategic Assessment Process Steps 362.3 Analyze Portfolio and Consider Alternatives 372.4 Opt for Divestiture 412.5 Position the Organization for the Divestiture 462.6 Next Steps 52Key Points 52CHAPTER 3 DIVESTITURE PLANNING 543.1 Overview 553.2 Planning Phase Process Steps 603.3 Approval 623.4 Organization Plan 703.5 Retention Plan 743.6 Assembling the Divestiture Team 783.7 Development of the Divestiture Plan 863.8 Development of a Communication Plan 89Key Points 95Appendix 3A Illustrative Divestiture Timeline 96Appendix 3B Retention Planning Document 99Appendix 3C Weekly Action Item Control 102Appendix 3D Communication Plan Outline 104Appendix 3E Issues and Resolution Control 106CHAPTER 4 PREPARING FOR THE TRANSACTION 1084.1 Introduction 1094.2 Preparation Phase Process Steps 1104.3 Engagement of External Resources 1114.4 Validation of the Transaction Structure 1204.5 Development of Selling Materials 1224.6 Identifi cation of Potential Buyers 1314.7 Preparation of a Data Room 1344.8 Overview of the Phased Disclosure Process 136Key Points 139Appendix 4A Illustrative Data Room Information Listing 140CHAPTER 5 DISENTANGLEMENT 1435.1 Disentanglement: Preparing the Business to Be Separated 1445.2 Disentanglement Process Steps 1465.3 Gathering Information 1495.4 Determining the Required End State 1585.5 Developing the Disentanglement Plan 1665.6 Quantifying the Disentanglement Costs 1705.7 Executing the Disentanglement Plan 177Key Points 180CHAPTER 6 MANAGING THE SELLING PROCESS 1826.1 Selling Process: Show Time 1836.2 Selling Process Steps 1856.3 Announcing the Intention to Sell 1886.4 Marketing the Business 2006.5 Due Diligence 2106.6 Bidding and Negotiations 217Key Points 220CHAPTER 7 STRUCTURING THE TRANSACTION 2227.1 Structuring the Divestiture Transaction 2237.2 Structuring Process Steps 2257.3 Bringing in the Required Expertise 2277.4 Analyzing Alternative Transaction Structures 2317.5 Drafting the Agreements 2427.6 Negotiating the Agreements 2577.7 Complying with Regulations 266Key Points 270CHAPTER 8 CLOSING 2728.1 Closing, Transitioning, and Learning 2728.2 Closing Process Steps 2738.3 Closing the Transaction 2748.4 Managing the Postclosing Transition 2778.5 Conducting a Postdeal Process Assessment 2808.6 Final Thoughts 282Key Points 290INDEX 293