A successful divesture requires concise analyses, rigorous preparation, and the right timing. With that in mind, BCG has developed a toolkit – called the Divestiture Readiness Diagnostic – that makes it easier for clients to make well-informed divestment decisions.
The five-step tool, applied prior to the realization of the divestment, starts with a strategy- and value-based portfolio review that reveals feasible divestment options. Next, with BCG working hand-in-glove with the client and its investment bank, the tool helps to determine what value a potential exit transaction could generate via various divestment routes. That paves the way for the third and fourth steps: identifying the optimal timing for the deal in terms of the capital market and of industry and asset readiness; and gauging the likely bidders and their appetites along each divestment route.
Once the key parameters of a potential divestment have been outlined, the last step in BCG’s Divestiture Readiness Diagnostic reviews different ways for the exit candidate to unlock additional value and helps its executives to adjust the existing business outlook assuming a potential stand-alone scenario.