Myth: A Divestiture is Merely an Acquisition in ReverseOctober 21, 2019
Divestitures certainly share multiple attributes with acquisitions: like conventional mergers and acquisitions, a divestiture has a specific life-cycle. It requires a laser-like focus on speed, stability and synergies. And a divestiture is a strategic business transaction that is anything but business as usual. But divestitures are often more complex than acquisitions, with more moving parts:
- Divestitures require a greater level of IT planning and preparation, with significant lead time to get ready to avoid business disruptions and ensure the normal operation of both entities following Day 1.
- The scope of a divestiture is broader, because you must not only execute the transaction, but also right-size the remaining business.
- The governance structure becomes even more important.
- Transition time (the period between deal close and migration on Day 1) is typically much longer in a divestiture.
Despite these differences, many of the fundamentals of effective M&A also apply to divestitures, and the key corporate staff involved in M&A will typically be chartered to also drive and manage divestitures.
Binary Tree has supported thousands of enterprise mergers, acquisitions, and divestitures. We’ve worked on many complex divestment transactions around the globe. Our end-to-end enterprise solutions enable organizations to achieve their business and divestment IT goals. To find out more about what we can do for you, get in touch. We look forward to working with you on your next merger, acquisition and divestiture.