Establishing a frictionless divestiture

In many cases, companies looking to maximize the value of non-core business units decide to sell to a buyer. In 2021,there was a 35% increase from the year prior in total value of corporate divestitures, the highest in the past decade (according to Refinitiv).

Exit options for a business or product line can lead to a long and arduous separation process. Therefore, it is important to start planning prior to signing on what will be part of the asset perimeter in order to determine transition services. Further definition of the transition services and planning for the interim and end state operating model then follows between sign and close. Outcomes of the operating model discussions will inform key architecture considerations. It is important to determine the separation approach, including the following:

• Logical vs. physical for Day-1 (infra, networks)
• Address entanglements

Even companies that rely heavily on M&A can either lack the expertise or the sufficient focus on divestitures throughout the full exit of the business. IT separation is the “long pole in the tent” that starts to lose the attention of leadership as the separation extends out. These executives are looking to re-focus on initiatives that will rebuild the core of the remaining business (RemainCo).