Transition modelling for divestment M&A outsource19 Feb 2019
While timelines for business transition projects are evermore compressed, the scale of activity is enormous. According to financial markets platform Dealogic, global mergers and acquisitions (M&As) during the first half of 2018 reached their highest levels since the first half of 2007.
And with the likelihood of additional turbulence to come this year in the European market, business development leaders are under pressure to ensure that their transition protocols are still relevant and up to scratch.
There are several reasons why a business might want to explore outsourcing, divestment or M&A this year:
Technological: The EY Global Corporate Divestment Study has found that 70% of companies expect large-scale transformational divestments this year, up from 50% in 2018. Meanwhile, 80% of companies expect the number of technology-driven divestments to rise in the next 12 months, compared with 66% last year.
Brexit: Uncertainty around the European market may also be a deciding factor in business transition. Some companies may be looking to divest as they face new challenges around supply chains, new trade tariffs and employee rights. From another angle, a Deloitte Report found that despite the EU referendum shaking investor confidence, the vote may lead to ‘favourable’ M&A deals.
Regulatory: Regardless of current events, this third driving force for changing business models is a continual factor for businesses to be aware of, when for instance, a divestment is ordered to help improve market competition.
Why transition modelling analysis is essential
In every industry, leaders tasked with overseeing business transitions are compelled by external forces to initiate transformations earlier, whilst expected to maintain a clear vision of how operations will not just survive, but will thrive even in uncertain times.
With the pressure on, it’s imperative to avoid unwanted or even unchartered commercial or service-related situations – many of which typically occur from changes to contract landscape, normally through down-size, re-shape or disaggregation of existing services.
At SK Euroca, we fully recognise, and talk about the importance of Transition Modelling analysis, firstly during presales, to support pre-bid win ratio; and also to story-board the potential for on-going transition management. Thereafter to drive the optimisation of services and relationships.
We’ve been commended for our work in this area by a number of the world’s best-known brands. Find out more about our transitional modelling analysis services here.