Preparing to sell or divest your business with confidence

Navigating your sale in uncertainty

Bring your future into focus

In the best of times, selling or divesting part of a business can be an emotional and financial rollercoaster. But in a world where uncertainty is the new normal, this process is complicated by volatile market trends, valuations and buyer motivations. What’s more, many businesses may be seeing signs of stress, whether it’s general in their market or unique to their organization.

To maximize deal value and deal objectives, how you position yourself is critical for success. It’s important to tread carefully and take the time to plan, strategize and put your best foot forward. Be proactive when making decisions while also being flexible to adapt to rapidly changing market conditions.

So how do you decide whether to fix, sell or divest part of the business?

Make the right move at the right time

For the best results, it’s best to give yourself enough time to prepare prior to going to market. But this isn’t always possible, so it’s important to understand what pressures you’re facing and plan as soon as possible.

Where are you on the distressed continuum?

Operational disruption
Financial stress
Liquidity crisis
Insolvency

Operational disruption

Loss of key customers and reduced demand
Supply chain disruptions
Loss of key employees and increased turnover
Temporary closures and social distancing measures
Risk to foreign operations with tariff and regulatory changes

Management actions

Reinvent

Reassess strategic position and business model
Divestment of non-core assets
Innovation and technology
Reevaluate capital structure

Financial stress

Liquidity issues (overdraft, stretched payables, etc.)
Breach of covenants included in financing agreement
Lenders, stakeholders or banks issue forbearance agreement
Significant loss in shareholder value (e.g. fall in stock price)

Management actions

Redesign

Evaluate segment profitability
Begin process optimization and transformation
Negotiate with lenders
Benchmark business and evaluate fit for growth

Liquidity crisis

Permanent closure of business segments
Prolonged reduction in spending
Fundamental changes in consumer behaviour
Significant debt due
Urgent sale of assets to fund operations

Management actions

Remediate

Short-term cash-flow management (13 weeks)
Operational restructuring
Government support (i.e. subsidies)
Capital injection
Stakeholder communications.

Insolvency

Inability to make payments
Equity holders lose control
Capital injection required
Informal closure
Formal closure
Liquidation/asset sale
Significant loss in debt-holder value

Management actions

Restructure

Develop and execute restructuring plan
Seek potential buyers
Support liquidation/asset sale process
Asset valuation

Navigating toward a successful sale

Selling or divesting a business requires careful planning and thoughtful execution. For both public and private organizations, it’s an opportunity to look ahead and create a path to value. But the process can be high-stakes, emotional and fraught with financial uncertainty. No matter your situation, it’s worth putting in the time and resources to get it right and achieve all of your objectives.

Explore the deal journey

Assess the implications of any sale from any point in the deal spectrum—from sale readiness to deal execution and post-separation transition.

Explore your deal journey

Understand your worth

In order to make informed decisions, you’ll need to know your company’s market value range. That’s why it’s important to establish a baseline valuation with the help of a professional.

Never rush to market

For the best results, allow adequate time to properly prepare prior to going to market. Once your plans are laid out, you want to be ready to move quickly on the best opportunities since the M&A market can change rapidly.

Find the right buyer

Finding the right buyer is only possible when you have thoroughly considered your various personal and business objectives, from liquidity and sale price to employee concerns.

Put some plans in motion

Take a step back and look at your business from a buyers’ perspective. Are there plans in place to execute on your new initiatives, and what are your ideas, prospects and strategies around growth and innovation?