Divestitures case study

How one company successfully divested several non-core operations to meet cash demands

The issue: A global leader in the electronic manufacturing and services industry was looking to divest several of its non-core business operations. The company was in urgent need of cash to service a fast approaching debt call by its primary lender, and therefore had to execute a series of rapid and smooth divestiture transactions.

Our approach: PwC performed sell-side due diligence on the divested entities, investigating earnings trends, working capital issues, and potential separation matters. We assisted management in gaining an accurate view of normalized earnings and working capital, and helped prepare the company for buyer diligence by identifying areas of value leakage. PwC also helped the company establish its overall Divestiture Management Office and achieve its operational separation goals, including transition service agreements and tactical IT and people separation.

The outcome: Both management and their bankers were well prepared for the upcoming deal negotiations. Within the first few weeks of PwC field deployment, the company’s Divestiture Management Office was established, operational and functional Day One separation plans were developed, and transition teams were launched to execute separation activities. The company successfully closed the transactions by the debt call date, raising enough cash to successfully restructure its debt.

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