Corporate Divestiture Activity: Do These Portfolio Optimization Strategies Drive Growth

Corporates have been looking to accelerate growth and add to existing platforms on the buy side as they focus on, and redefine, their core business. Major global diversified industrials such as GE, Honeywell, Danaher, and Smiths, among others, are spinning off, or divesting assets as they redefine their portfolios for accelerated growth.

2017 was an excellent environment to sell – and a number of corporates did just that. Taking a page from the private equity playbook, many corporates sold at the top of the market. The total number of global divestiture transactions in 2017 was 7,897, with the US portion of that representing 2,499. Globally, this amounted to an increase of 1.7% over the prior year.

Private equity firms are clearly hungry for these overlooked (and often under-invested) assets as they frequently provide an excellent value creation opportunity when you have the right people, strategy, and capital in place to focus these opportunities in the right direction.

Livingstone is actively advising large corporates on their divestiture transactions and we expect to continue to work with more corporate sellers as they continue to realize that now is an optimal time to maximize value and redeploy their capital to areas of greater focus and growth within their firms. Our experience in this area, having been awarded several mandates, give us the relevant, first-hand experience needed to produce positive outcomes for our clients.

This piece is part of the 2018 Global Industrials Publication.