Johan Schlasberg 

About selling companies and projects

It requires different processes to sell an entire company or parts of a business. Sales have different causes, but in both cases, the results will be better if you have a clear exit strategy.

Exit-strategy when selling parts or projects

Selling subsidiaries, parts of a business or project is often treated with less interest and strategy than acquisitions. A study a few years ago from one of the global audit firms showed that companies under-invested resources in "exit processes".

red ladder exit strategy

A "Red ladder" exit strategy

Corporate management is often less interested in the financial outcome of a sale. The picture illustrates that transaction speed is important more or less irrespective of the result.

The Board may already have decided on a divestment and is focused on thinking ahead. Management time is a scarce resource, and it is often best used for "future projects". Any losses in the event of a divestment - actual or accounting - can be called extraordinary.

 

green ladder exit strategy

A "Green ladder" exit strategy

Even if the above is true, there can be significant value in projects and knowledge that can in various ways be transferred to a new owner. Perhaps a new - more or less employee-owned - company can be created if it receives initial support from the old owner. Such an exit process may take a little longer (or is planned in advance) but can provide a much improved financial dividend for the seller.

Exit strategies for the selling of an entire business

In some projects, I have contributed an analysis and a digital presentation - in Swedish and English - of the company that was to be sold. In one case, the buyer indicated that the choice to buy that particular company had been affected by the educational presentation.

This sounds reasonable in light of that several people on the buyer's side do their analysis from different perspectives. (I do not work with companies where the expected value is below 2 MUSD.)