As opposed to integrations where the acquirer clearly knows who the buyer and seller are, separations require that sellers manage the planning process through a period of substantial uncertainty before a specific buyer is selected. In early stages of a divestiture, a seller may not know whether they will ultimately sell to a corporate buyer with infrastructure to integrate into, or a financial buyer who may require an entire operating company be built around the divested assets. Tax-free spins have a different dynamic, where the NewCo and RemainCo are clear, yet there is uncertainty in determining what stays and goes in terms of people, assets, processes, systems, and contracts.
KPMG’s market-leading approach takes into account both of these scenarios and the above principles apply in each case. Our entanglement mapping approach is specifically designed to address these uncertainties and position sellers for the full range of potential buyer types and TOMs.
While conducting a successful divestiture may not be straight-forward, our approach does hold the potential to preserve value and to unlock unrecognized value within life sciences organizations.