Faced with evolving sector landscapes – sector convergence – and external challenges, businesses are continuously evaluating their growth strategies and competition, to be responsive to market changes. For Asia-Pacific executives, 61% say shortcomings in their portfolio or strategic review process have sometimes resulted in failure to achieve the intended divestment results.
Using advanced analytics
Advanced analytics can produce greater insights for buyers on the historical and future performance of a business, while also enabling sellers to tailor, and in turn to strengthen their value story, for different buyers. The EY Global Corporate Divestment Study finds that companies using analytics in negotiations are three times more likely to achieve a higher sales price and to increase the valuation of the remaining business, as well as to close the deal faster, than those that do not.
Reflecting global trends, 69% of Asia-Pacific respondents highlight the importance of using analytics early on in the divestment decision-making process. Analytics is categorized as important to 61% of companies in their pre-sale preparation, assisting with identifying potential issues and positioning the business in the best light.
However, only 30% of sellers in Asia-Pacific compared with 39% globally say they used analytics during buyer negotiations, but 50% says it’s a step they should have taken. EY’s Stress Test book shows that as part of the due diligence, “buyers expect a comprehensive self-service virtual data room that supports buyer confidence in the numbers.” Leveraging analytics effectively at every stage of the divestment process can help both sellers and buyers optimize value and lower risk.