Prairie Capital Advisors Inc., a corporate advisory and investment banking firm in Oakbrook Terrace, hosted its first webinar on corporate divestitures on Thursday, May 20.
In its most basic terms, a corporate divestiture is concerned with portfolio management at the business unit level. Mutual fund managers consistently rebalance their portfolio by selling stocks they perceive to be overvalued and buying shares of undervalued companies. Those who do this well frequently generate returns in excess of their peers. Similarly, corporate executives should periodically evaluate their business and dispose of units that do not fit within or contribute to the core competencies of the company. Executives who do this well have historically generated higher shareholder returns than companies that do not pursue periodic portfolio pruning.
The webinar, entitled "Enhancing Shareholder Value through Corporate Divestitures," featured Prairie professional John Waller, along with Tracy Larsen of Honigman LLP and John Grivetti of Crowe LLP.
With close to 100 years of collective experience, the three industry experts discussed the importance of a corporate divestiture program, the types of corporate divestitures, and the special factors to consider in a divestiture from a legal, accounting, HR and IT perspective. The presenters also dissected several examples of corporate divestitures from their own careers. Some key information points from the webinar include:
• Corporate divestitures encompass several subtypes, including spin-out transactions, product line divestitures, sales of a business unit and facility sales.
• Any size of company should be open to corporate divestitures. Management teams should constantly be evaluating products lines, facilities or portfolios of assets to understand if they still align with their core competencies and overall strategy.
• "Focused divestors" who made frequent and material acquisitions performed the best in the cases presented. In other words, companies that actively managed their portfolio of businesses generated the highest stock market returns.
• There are many reasons to consider a divestiture beyond cash generation. Divesting a business can allow management to focus its resources more efficiently. A divestiture often simplifies the remaining business, which can help improve the company. Another reason to divest a business is that it may be more valuable to another owner and may result in a higher than expected sale price.
This webinar recording is available for viewing here. For more information, please contact John Waller at firstname.lastname@example.org or (312) 878-9167.
About Prairie Capital Advisors
Prairie offers investment banking, ESOP advisory, valuation advisory and financial reporting valuations to support the growth and ownership transition strategies of middle-market companies. Headquartered in Oakbrook Terrace, Illinois, the company is a leading advisor to closely-held companies nationwide. Prairie was named the 2020 Valuations & Fairness Opinions Advisor of the Year by M&A Atlas. For more information, visit www.prairiecap.com.