From time to time Disposals happen from most companies. Over the long life of a business there will be shifts and changes in strategy driven by markets or objectives – and this change in strategy can lead to part of a business being sold. When this happens there will be scores of stakeholders involved both internal, external, management teams, investment bankers and the Big 4 for evaluation, due diligence, and risk assessment will all be a deep in the detail.
To drive maximum value and the best possible outcome for the selling business a Disposals expert is critical. Somebody to pull all parties together, to explore all options available from the start and ultimately to act purely on the behalf of the seller. An option here could be a secondee from the big4, however, that secondee will upsell extra services from their employer, will not have acted ‘in-house’ previously and the transaction experience will be limited to that of an advisor not a ‘doer’. Ultimately they will also cost three times that of an interim.
In a nutshell, here are four main reasons to hire an interim disposals expert should your business be embarking on a sale process:
- Drive optimal price and value in all aspects for the seller. Better outcomes financially, culturally and in organizational design moving forward
- Building the narrative internally to ensure all parties are bought in and striving for the best outcome for the business
- Network of contacts across investment banks and the sector to leverage best possible buyer
- Roughly a third of the cost of a Big 4 secondee, with many more years experience
- Minimise excess consultancy/advisory usage, ensuring you get the ‘A team’ and best possible delivery when you engage
- Deep experience of the carve-out process and how it’s best achieved
So, what is currently happening in the disposals market?
Due to the current economic climate, we are seeing a steady increase in the volume of interim disposal requests. In particular, many of these hires are focusing on selling underperforming or non-core parts of a business.
Over the next two years, as challenging economic conditions continue, we expect that disposal interims will be used in greater numbers, particularly within the FTSE350, to help businesses shift focus to their core areas of expertise and future proof their market share. Further, businesses are always looking to change strategy and one of the ways of doing this is disposing parts of their business.
Why are companies hiring interim disposals from PCR?
The disposal experts we recommend to businesses have up to 15-20 years’ experience in project managing the disposal process. They will oversee every part of the business being sold which includes initial preparation for a sale process through to the eventual the carve out and separation. That means implementing in-depth processes and procedures and cross-working with multiple functions within a business such as finance, HR, procurement, and IT. Our disposal interims can put everything in place and ensure the disposal is tied up neatly so it can be moved on to a new ownership.
Are there any skills that interim disposals need?
They need to have a deep understanding of mergers and acquisitions, specifically on how companies get bought and sold. The work is by definition focused on the sale side. They will also engage with the right people, make deals and negotiate, and know how to communicate with internal and external stakeholders at every level. Often the more years of experience they have, the more they can offer to the business. For example, a higher-level disposal interim might be able to define a strategy for both the seller and buyer and come up with a long-term vision on how to best move forward.