Maximizing Divestiture Success for a Large Industrial Manufacturer
Challenge
When a large industrial manufacturer was divesting a multi-plant operation in its portfolio, it needed to individually evaluate each of its nine different plants across several different countries in order to provide maximum flexibility in bringing the business to market and negotiating with buyers. While some plants were located at shared sites and others were located in standalone locations, all of them utilized different approaches to inventory accounting and management. Additionally, the global management team had historically run the business as one cohesive unit and no plant-level analysis had been done.From these efforts, we were able to illustrate the strong financial attributes of the business, which led to the successful and timely sale of the operation at a value that exceeded expectations.
How we helped
Riveron was engaged to build out a dynamic, detailed model to support the company’s financials on a normalized basis. By working with management to identify potential scope changes, key value drivers, and likely buyer interests, we were able to reconcile and analyze the data in order to better understand the business and its operations. Following this period of evaluation and analysis, we created a fully dynamic, multi-plant model with detailed breakouts of plant-specific performance, including sales, raw material costs, production costs and other indirect costs of sales.
Results
The model created allowed for fluid, real-time updates to the scope throughout the negotiation process with buyers. The plant level analysis that we conducted was used to support net working capital true-up through closing. From these efforts, we were able to illustrate the strong financial attributes of the business, which led to the successful and timely sale of the operation at a value that exceeded expectations.
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