Develop a digital capability for orchestrating M&A and Divestitures

Active portfolio management can help you build organizational resilience—even in uncertain times.

By Madison Klein, Product Marketing Manager and Claire Mai, Associate Product Manager

Published on November 3, 2020

In the first half of 2020, as markets reeled and companies were forced to pivot near-term strategies and make abrupt changes to their operations, many companies halted or delayed planned M&A activities.

Business leaders focused their efforts on ensuring continuity, invested in technology and change management efforts to increase digital workplace capabilities, and reassessed, reprioritized, and replanned for a new, increasingly volatile market landscape.

Through this period of uncertainty, most large companies learned that resilience is predicated upon the ability to adapt to rapid change, requiring responsive work prioritization, rapid orchestration, dynamic models for resource allocation, and flexible access to the right capabilities at the right time.

Now, as companies reassess their strategic plans with these learnings in mind, business leaders are going to once again view programmatic mergers, acquisitions, and divestitures as critical to ensuring that portfolios remain well aligned with strategies.

In order to do so successfully, many large organizations are having to invest in their own internal M&A capabilities to adjust to digital business and create well-honed, repeatable, end-to-end processes for execution. 

Catalant’s SaaS Platform and Expert Marketplace are designed to help you increase your organization’s ability to orchestrate mergers, acquisitions, and divestitures, access the right internal and external capabilities to execute, and create operating processes and playbooks that improve over time.

What’s Keeping You From Divesting?

Research supports that active portfolio management can create significant competitive advantage, even through periods of volatility, and that companies with programmatic approaches to mergers, acquisitions, and divestitures outperform their competitors over the long term.

A recent article by McKinsey & Company, “What’s keeping you from divesting?” makes clear that holding assets that are misaligned with business objectives can pose significant business risk:

The reality is that the right time to begin the process of divesting an asset is the moment you recognize that it no longer supports your strategic objectives. Business leaders who wait expectantly for market conditions to change often risk a continued decline in the asset’s performance, accompanied by an increased need to divest, but now at potentially lower purchase prices.”

Source: McKinsey & Company

Yet, while many business leaders have evaluated their portfolios and identified assets that no longer align with the strategic priorities of the business, they are reluctant to start divestiture processes, often due to fears that are not supported by data, such as misperceptions of asset value, underestimating buyer interest, concerns about damage to the rest of the business, concerns about timing, fear of sunk costs, and emotional attachment to the asset.

As companies seek to increase liquidity and realign their portfolios with their strategic objectives, they will need to adopt the right technologies to develop repeatable processes that allow them to move past these fears and hone their internal capabilities for mergers, acquisitions, and divestitures.

Case Study

Orchestrating Integrations & Divestitures in a Multinational Conglomerate

A multinational conglomerate recognized the need to increase its ability to integrate new acquisitions and spin off non-core parts of its business in an increasingly digital workplace. 

This requires a high degree of coordination, harmonizing systems and standards across disparate business units, brands, and product lines, and ensuring that the right functional expertise is available for the right work at the right time.

The company uses Catalant’s SaaS Platform to build out repeatable playbooks for mergers, acquisitions, and divestitures; ensure that they are efficiently executing through visibility into how work is progressing across the portfolio of initiatives and projects; access the right resources through centralized talent pools of functional experts; and track work progress and resource utilization across playbooks to mitigate risks and refine processes over time.

When teams need to overcome gaps in skill, knowledge, or capacity to drive execution forward, they can also flexibly access external talent through Catalant’s Expert Marketplace of more than 70,000 elite independent consultants and firms on demand.

A Digital Workplace for Executing Mergers, Acquisitions, and Divestitures

Since mergers, acquisitions, and divestitures are cross-functional, organization-wide initiatives with myriad interdependent workstreams, M&A playbooks are critical for orchestration. When companies execute mergers, acquisitions, and divestitures through the Catalant Platform, they follow the same repeatable playbooks to ensure that each phase of an acquisition or divestiture follows established best practices.

Playbooks & Templates

Businesses can load their own playbooks into the Catalant Platform, save templates, and iterate to incorporate learnings through execution, ensuring that they do not lose institutional knowledge and refining their processes over time.

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Access to M&A Expertise On-Demand

First-time users can also get started by using one of Catalant’s pre-built starter templates and engaging M&A experts through the Expert Marketplace to help build out best practices.

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Collaborative Digital Workspace

Orchestrating mergers, integrations, and divestitures through a collaborative digital workspace also gives cross-functional teams a shared understanding of work and progress against objectives and KPIs.

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Visibility Into Work Progress

Visibility across workstreams allows business leaders to identify at-risk initiatives and projects, enabling effective intervention to keep work on track and helping to ensure smooth execution.

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Right Capabilities, Right Work, Right Time

Executing mergers, acquisitions, and divestitures requires access to functional experts at different phases. The Catalant Platform allows organizations to create centralized talent pools to ensure fluid access to the right capabilities to get the right work done at the right time.

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Let Us Help

Getting from strategy to execution calls for a centralized SaaS platform.

Through years of developing Catalant’s SaaS platform and Expert Marketplace with our enterprise customers, we’ve learned that uniting the right people, processes, and technology is essential for effectively executing strategy.