Divesting for success with pre-sale due diligence

As the economy thrived in the 1990s, many companies adopted a successful strategy of growing through acquisitions. But when the economy downshifted, and the marketplace grew volatile, company boards and

Buoyed by board support and executive-level commitment, companies have begun to dispose of non-core businesses to concentrate on core strengths. They are also casting off maturing businesses and selling poorly performing assets to raise cash.

Once viewed by corporate boards and management as a last-resort reaction to a failed merger or acquisition, divestitures are becoming a first-choice strategy as companies seek to create and preserve shareholder value. In a recent KPMG study of senior leaders at Fortune 1000 companies, 73 percent of those surveyed predicted that the annual number of corporate divestitures in the US would rise in the next five years. Further, 88 percent of these senior executives agreed that divestitures may be part of a forward-thinking corporate strategy.