Using
Divestitures as a
Lever for Change
By Arthur Bert and Caroline
Firstbrook, Accenture |
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The
sale of a business whose workforcediffers
substantially in composition,practices or
culture can also eliminate damaging internal
friction and createa buoyant sense of optimism
amongthe employees who remain. The use ofculture
assessment tools can help tohighlight these
differences, and can be used to set and
measure progresstowards cultural and behavioral
goalsfor the remaining business. Optimizing
Back-Office FunctionsIt is common in a divestiture
for theparent company to continue to supportsome
of the divested unit's back-office functions
for a period of time afterthe sale. |
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As
this support is rampeddown, there
is often an opportunity fora fundamental
redesign of how back-office functions
are performed. Thismight include relocating
activities totake advantage of labor
cost differences,or outsourcing functions
entirely
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Takeovers and Leveraged
Buyout
by Gregg A Jarrell, professor
of economics and finance at the University of
Rochester's Simon School of Management
Corporate takeovers became a
prominent feature of the American business landscape
during the seventies and eighties. A hostile takeover
usually involves a public tender offer—a
public offer of a specific price, usually at a
substantial premium |
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market price, good for aspecific price,
usually at a substantial premium over the
prevailing market price, good for a limited
period, for a substantial percentage of
the target firm's stock...
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| U.S.
Leveraged Buyout Market From 1980-2002 |
The leveraged buyout market rose to prominence in the
late 1980s when private equity firms such as Kohlberg
Kravis & Roberts ("KKR") and Fortsmann
Little were consistently making headlines with large
buyouts including the largest leveraged buyout ever,
KKR's $25 billion buyout of RJR Nabisco in 1988. The
success of these financial sponsors (i.e., private equity
firms) and others in completing transactions and earning
favorable returns attracted many other parties to the
industry. There are currently hundreds of financial
sponsors focused on buying companies of all sizes across
many industries.
With an estimated $120 billion in uninvested capital,
hundreds of financial sponsors, and a difficult M&A
environment, private equity firms currently face a challenging
environment.
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