An extensive study counterintuitively reveals that a majority of divestitures are accompanied by lagging stock performance for the divesting firm.
Private equity bidders can accelerate a deal's time to close and boost the multiple, says EY. But how do you keep them at the table?
Divestment of non-core units is an effective way to streamline the business and free up capital to support growth.
Eighty-two percent of companies surveyed say “macroeconomic volatility” will increase their chances of divesting a business in the next year.
Divestments are being used mostly to grow core businesses and invest in new products, an EY study finds.
The financial software is also divesting QuickBase and Demandforce so it can focus on its tax preparation products.
“Reallocating capital from non-core to core business and core business adjacencies will be the name of the game in 2015,” says an Ernst & Young chair.
In addition, investors are more open to companies pursuing divestitures aggressively now, as long as the exit strategy is "credible," says a BCG report.
