27 Jun Divestitures – getting smaller to grow stronger
Every business wants to grow, but as it grows it often changes and some parts of the business may no longer be a good fit. When that happens, the company should consider selling that part of the business. That is called divesting.
The principle behind divestment is simple: sell a division, subsidiary, product line, or other asset that is not contributing to your core products and services. The buyer may be another company, an investment group, or some of your managers. That approach can enhance your growth strategy by keeping you focused on optimizing the performance of your overall business. In fact, as your company grows, divestment may become part of your regular strategic planning.
It can be painful for an entrepreneur to sell part of their company in which they have invested so much time and energy. But it some cases it may be a crucial step to reaching full operating potential.
Austin Dale Group can provide unbiased guidance on your strategic alternatives and help reduce some of the tension that goes with the difficult decision to get smaller in the short term in order to improve long-term growth prospects. In short, we can help you through the process, from strategy, to financial analysis of the division, through the marketing and sale of the divested unit.
For technology and healthcare companies, this is a good time to consider a divestiture. Valuations are high and there is a large amount of capital that companies and investment groups have available to deploy.