Smart Moves: Managing the Enterprise Portfolio
by Jim Jeffries, Chairman of the M&A Leadership Council
In past decades, corporate executive teams focused on organic growth as the single method for creating value for their shareholders. In the 1980s a new wave of mergers and acquisitions (M&A) swept into the boardrooms globally. CEOs found that if organic growth couldn’t lift the stock price, they might create value by buying other companies and harvesting cost reductions via synergies. They quickly realized there were many other benefits to M&A, if they could successfully integrate the acquisition, but that is a topic for another day.
We are now experiencing a new era for creating enterprise value: it’s called MA&D (mergers, acquisitions & divestitures). Roughly 30% of all transactions today are divestments. Top executives are learning to manage their companies as portfolios, much like the Private Equity players. Each business within the portfolio either adds or diminishes the value of the overall enterprise, so making smart moves (strategic acquisitions as well as divestitures) is becoming a new competency requirement for the best-run companies.
In 2018, the M&A Leadership Council introduced our first Art of M&A℠ Divestitures & Carve-outs training program. This 3-day event became an overnight success, and the M&A community is quickly realizing that a Divestiture is not an acquisition done backwards. Divestitures are tough, requiring extreme preparation; and the separation of either an entire business or a carved-out portion can be highly complex.
We are happy to announce that registrations are open for the 2019 Art of M&A Divestitures & Carve-outs to be held in San Diego, CA, on April 16th -18th. Register today before the seats are taken! I look forward to seeing you there!