M&A Science hosted an incredible “Virtual Summit” with a powerhouse lineup of speakers and moderators. Here is the link to replay it. Our own Galina Wolinetz hosted a session (begins at 2:01:00) on “Lessons Learned from Large Scale Divestitures.”
A couple of insights to highlight:
- At the 2:25:00 mark, Galina asked her panel about the critical role of communication during a divestiture–keeping a developing transaction confidential while providing as much transparency as possible to affected stakeholders when the time is right. Jillian Kaebel-Sisk, Caterpillar’s Global mergers, Acquisition and Divestitures manager, stressed the importance of developing a separate work stream dedicated to communications throughout the process, using NDAs to communicate to executive officers, directors and other key constituents while the transaction is coming together. “On the other hand, we did a divestiture that was the second one within the same business unit,” she said. “We needed to address employee angst throughout the entire business unit, even the part not being sold, with a different approach in our strategic communication plan. We decided to not keep the divestiture confidential. We would be upfront with employees and address their anxieties up front. So even the communications strategy can change, so deciding what that is early on and who is going to lead it, is critical.”
- Galina asks (2:32:15) about the point in a divestiture timeline when employees “turn in their allegiance” to the acquiring company, “more at an arms length and less collaborative” with their colleagues at the selling company. “The transitions services agreement is absolutely so critical in the world of technology,” said Josh Beggs, Field CTO at Dell Technologies. “The TSA outlines the tactical needs of the divestiture, including something as seemingly simple as who owns the IP addresses of your systems, that can be very complex and argumentative at times between companies in a divestiture. Make sure the focus is on the TSA … so everyone has an understanding and an agreement going in of what their role will be. There will still be challenges but, trust me, it will be easier.”