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Corporate Divestiture
A public corporation acted as the holding company for four distinct and different industrial businesses. A large shareholder of the public holding company was applying pressure to liquidate its shares in the company.
The public company was selling at a conglomerate's discount to the market of other industrial peers. The stock of the public company was too illiquid for the large shareholder to sell a meaningful block of its stock.
We reviewed the option of selling the public company as a whole to strategic or financial buyers. A sum-of-the-parts analysis was also conducted, showing a significant advantage in selling the company in four separate pieces.
After orchestrating two relatively quick and attractive auction processes for divesting the larger divisions, it took another 12 months to effectuate the divestiture of the remaining two businesses in a more deliberate sale process with a limited number of buyers seriously in pursuit. The net cash generated in the sum-of-the-parts divestiture strategy yielded a return that was 40% higher than the straight sale of the entire company.
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