Como identificar e avaliar potenciais candidatos a desinvestimento ou spin-off em seu portfólio?

Corporate strategy shapes divestiture decisions by providing framework for alignment with long-term goals. It assesses strategic fit, portfolio optimization, and risk management. Evaluation criteria include financial performance, strategic fit, market dynamics, and growth prospects. Strategy guides communication and execution, ensuring alignment with objectives and stakeholder expectations. Overall, it enables informed decisions to enhance value and support long-term growth through divestitures.

In my experience, divestiture or spin-offs are part of an elaborate corporate development activity. We are talking of companies which have a significant size and activities that encompasses several sectors and. / or geographies. Such companies are most likely to have a Head of Corporate Development and / or a Strategy Director. The above considerations are therefore relevant but will be very certainly part of a routine process for the bigger players. Mid-market players, on the other hand, who have grown into a multi-entities activity but are not yet structured as a large group can more easily miss on the importance of these issues and / or lack the skills to deal with such decisions.

After decades navigating corporate development, here's my take on aligning divestments and spin-offs with corporate strategy: It's not just about identifying misalignments; it's about unlocking potential. Consider a business unit with mediocre financials yet occupying a niche with future growth possibilities – a sale means missed opportunity. Strategic fit is dynamic. I've seen units initially spun off return years later, their value maximized outside the parent company. Numbers tell the story, but experience teaches us that divestment analysis demands a long-term lens. Every decision carries a ripple effect on resource allocation and overall corporate capabilities.

I am not sure that I would put these two corporate events in the same sentence. Divestments and sales (which can take many forms) are generally done due to declining strategic fit or performance. Whereas spin-offs are typically done to unlock value by putting the business or asset in a different environment where it can be better understood/positioned/funded/managed to unlock and realise trapped value. A good example today might be a multi-commodity miner spinning of its Uranium assets into a pure play energy transition Uranium company and providing its shareholders with in-specie shares in that Uranium newco - the motivation being to unlock the Uranium value for the same shareholders in a separate company that can then be quoted.

Identifying and evaluating potential divestiture or spin-off candidates in your portfolio involves a thorough analysis of both the strategic fit and financial performance of each business unit. Here are a few steps that I use to guide me through the process: Strategic Review of Core vs. Non-Core: Determine which business units are core to your company’s strategic vision and long-term goals. Non-core units that don’t align with the strategic direction are prime candidates for divestiture or spin-off. Market Position: Assess the market position and competitive advantage of each business unit. Units that struggle to maintain a competitive edge may be better off as independent entities.

As important as it may be, I feel that presenting financial performance as the first criteria of relevance is completely missing the strategic point. Even with a good financial performance, if an activity is clearly not in line with your core focus and the group strategy, a divestiture or, more likely, a spin-off could be the adequate solution. It is a bit of a cliche to think that only poorly performing activities should be spun-off or divested. Some activities may be very promising and yet have very poor financial performance for many years till they mature (think Chat GPT) and at the same time, some activities can be very profitable but not anymore on the strategic roadmap (high margin fossils energies related businesses)

My decades in M&A have taught me that financial analysis goes beyond spreadsheets. It's about seeing the story hidden within the numbers. Profitability's important, but I've seen units with modest margins carry untapped value in the form of IP or market position. Also, divestments can impact far more than just income. Consider the potential tax implications for the broader company, debt covenants, and how it might affect your overall risk profile. Analyzing a divestment's true costs means looking well beyond the P&L of the unit itself.

Throughout my career, I've learned a harsh truth: markets can turn faster than the best-laid plans. Attractiveness isn't static. A niche with low barriers to entry today could be tomorrow's battleground. Regulatory shifts can transform a burden into a strategic advantage. Evaluating market attractiveness means forecasting and stress-testing scenarios. It's about imagining not just where the industry is, but where its fault lines lay and how those might open up unexpected opportunities for a standalone entity focused on that single space.

Michael Porter's Five Forces model is a great lens through which to assess industry attractiveness. According to Porter, an industry is attractive if: (a) the threat of new entrants is low; (b) the bargaining power of suppliers is weak; (c) the bargaining power of buyers is weak; (d) the threat of substitute products is low; and (e) the intensity of rivalry among industry competitors is low. However, given software/technology are currently driving unprecedented levels of creative destruction, Porter's Five Forces needs to be re-evaluated in light of technology disruption. The still works as long as you realise that software can represents a new entrant, supplier, buyer, substitute and rival - at the same time.

This is really a key consideration to take into account. Many times the decision to spin-off a business is clearly the right "on the paper" and end up being an operational disaster. Many things can transform a divestiture into a nightmare: a supply chain is disrupted, historic clients are not happy with the move and more and more, technology complexity are preventing a clean-cut (e.g. when Natwest tried to spin off some of its business and was twice prevented by an IT breakdown!)

In my experience, operational feasibility is where good deals go to die. A divestiture may look fantastic on paper, but the devil's in the details. Years ago, I worked on a spin-off delayed by something as mundane as shared IT infrastructure – a 9-figure delay because the groundwork wasn't assessed early enough. Analyzing feasibility means deep dives into the not-so-glamorous: contracts, talent, even physical assets. It can reveal hidden costs that torpedo an otherwise promising move.

My decades in corporate development have taught me that sometimes the best value isn't from the obvious players. Identifying potential buyers or spin-off structures is as much about creativity as due diligence. Consider smaller, more agile competitors who see the divested unit as a shortcut to scale or market entry. Or, think outside the traditional spin-off: management buyouts, carve-outs, even licensing agreements can sometimes unlock hidden value that a straightforward sale never would.

One of the most overlooked factor in divesting activities is the risk to create a powerful competitor. Or to lose what was making the core of your value. One of the best examples I have in mind is ALCATEL: as they wanted to focus on their "core business", they progressively divested and sold many of their historic businesses. On the way, they helped create a national competitor, ASTEEL, which built its business by getting subsidised businesses and in the end, ALCATEL shrunk to such a small group that it nearly entirely disappeared. A few years before it was one of the largest French group and European group.

In divestures or spin off situations, keep in mind, that you are to let go of businesses and therefore you cannot run the process like you would when acquiring businesses. Don't forget speed, you want to be done quickly. So, find the sweet spot between speed and financial outcomes.