Sell-Side Success How BCG Supports Divestitures, Spinoffs, and Carve-Outs

Transaction Center Product Series Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive. Sell-Side Success How BCG Supports Divestitures, Spinoffs, and Carve-Outs

Transaction Center Product Series A Story of Divestiture Done Right

In the aftermath of the 2008 financial crisis, the Merckle family realized it was necessary to reorganize its portfolio of businesses. With approval from the financing banks, the representatives of the family opted to carve out and divest ratiopharm, the group’s generic drugs business unit, freeing up cash to deleverage the rest of the group.

This divestiture was to become the strongest possible team for a model of how to maximize the strategic transaction support. value of a carve-out, because Working closely with just two ratiopharm’s owners and top investment banks, ratiopharm’s managers paid very close attention management and the lender banks to the factors that really drive value added independent expertise to for the acquirers of a divestment the divestiture team. The company candidate. also invited M&A specialists from BCG who brought with them deep It would not be easy to sell expertise in the generic drug ratiopharm for an attractive business and whose independent price—that much the management eye would help underscore the team knew very well. Although business logic of any divestiture, the generics unit was the fourth thus anticipating potential largest player in the global generics investors’ concerns from the very market at that time and was tipped beginning. by the media to be worth at least €2.5 billion, it faced fierce and The divestiture team then growing pressure from German developed and followed a health care insurers that were systematic plan for creating squeezing the pharmaceutical a compelling business case, industry’s margins. helping management to pinpoint ratiopharm’s standalone benefits Given these challenges, the owners and identifying the specific understood from the outset that synergies that the unit would offer it would be crucial to deploy if it were to become part of an

2 | SELL-SIDE SUCCESS The move netted €3.6 billion for Merckle and created the world’s leading generic player

acquirer’s larger generics group. greatly to the credibility of the business plan. Day One began with an in-depth assessment of ratiopharm’s existing Carefully and deliberately, and future markets, taking into ratiopharm’s executive board account competitive dynamics, assembled a consistent, in- future patent cliffs, the company’s depth business plan that was asset strategy, and its operational fully supported at every level of capabilities. What followed was management. Finally, the generics a joint exercise to compile a full- business was ready to hit the fledged strategic business plan market, and prospective buyers for each of ratiopharm’s 25-plus quickly began to appear. During business units and regional entities. the weeks-long auction process BCG’s organizational experts with strategic and financial bidders, helped management identify and BCG supported the management quantify improvement levers, in navigating the critical expert providing additional value potential. sessions as well as the Q&A processes. It is important to note that these improvements had been initiated With input from BCG’s seasoned in light of a potential divestiture, a divestiture experts and from the full six months before the public investment bank’s deal-making phase of ratiopharm’s divestiture professionals, ratiopharm’s began. As a result, most of the executives were able to design a improvements were halfway compelling yet practical sell-side implemented by the time investors process, tailored to the needs began reviewing the business plan. of specific buyers. Their efforts That preemptive move alone added culminated in the successful sale

BOSTON CONSULTING GROUP | 3 of ratiopharm to Israel’s Teva—a welcome was the announcement of move that netted €3.6 billion for synergies valued at more than €300 the Merckle Group and created the million based on the combined world’s leading generic player. Teva-ratiopharm business plan.

Even though Teva paid far more than the market had anticipated, its share price rose by 3.3 percent on the day the deal was announced and climbed another 3.2 percent over the next two days. One of the key reasons for the market’s warm

4 | SELL-SIDE SUCCESS “All participants in the selling process always praised the professional work and team experience with BCG. I also want to thank BCG personally for their dedicated and extraordinarily competent work as well as their willingness to support [us], really, at any time.”

— Oliver Windholz, former CEO of ratiopharm lessons learned from a divestiture done right

The successful sale of ratiopharm stood apart from other deals:

❶ ❸ Shareholders and management All relevant documents had a tamped down the emotion. strategic edge. This enabled For them, M&A was a strategic shareholders and management to tool to free up cash, optimizing communicate a long-term growth the value of the overall Merckle story and properly describe cor- Group. porate capabilities and potential synergies to investors. ❷ ❹ They knew the asset’s value Integration of several executive and marketed it accordingly. levels and all functional de- The information memorandum partments to the sell-side team and management presentation enabled employees to participate revealed an in-depth business actively in the process. This boos- plan that was aligned with ted commitment and employee market and competitive dyna- morale and facilitated deep and mics and that included clear- fast-paced implementation of PMI. cut operational improvement measures. ❺ External M&A experts were brought in. Their involvement provided process security and freed up capacity for day-to-day business and to realize operational improvements. lessons learned from a divestiture That’s How We done right Helped ratiopharm. Imagine What We Could Do For You

The truth is, many corporations still treat divestitures as an afterthought. When they decide to sell businesses, they focus on doing a deal, any deal, rather than finding the deal that maximizes shareholder value. But it doesn’t have to be that way. BCG can help.

BCG’s capabilities cover the entire divestiture value chain. More often than not, we support our clients with portfolio assessment well before any divestment decision is made. We provide end-to-end content support for clients’ management teams throughout the entire process—from the initial strategy portfolio review and exit decision to implementing the divestiture and ensuring the final details of the deal are fully wrapped up.

Portfolio Exit decision Exit realization review & strategy

Vendor due diligence Timing Strategic fit/ Carve out feasibility Best owners/ Equity story Deal transaction & marketing execution models Business materials support Valuation plan impact Pre-deal improvement Project office/Process management

“Creating the case” “Unlocking the value”

Let’s see exactly how BCG helps companies all along the divestiture value chain.

BOSTON CONSULTING GROUP | 7 Creating the case From Portfolio Review to Pre-Deal Improvement

The overarching strategic priority might be. Our portfolio strategy for businesses is to achieve methodology evaluates an asset’s profitable growth and thus create strategic fit and potential for value value for their shareholders. creation, and assesses overall For most major companies, portfolio health before and after one crucial way to do this is to divestiture. deftly manage their portfolio of businesses—expanding through Valuation/impact acquisitions or joint ventures Clients considering divestitures when it makes business sense, have to know the price ranges in and shedding businesses when which they should sell—and that that is the best path to value. involves knowing the value of the They have expert help when they asset as a stand-alone business, need it: BCG has all of the skills understanding how exactly it and experience required to help creates value, and predicting to companies analyze their portfolios what extent the divestiture itself in terms of market attractiveness, will alter the valuation. competitive position, and financial performance. Specifically, we offer Optimal timing these services: BCG is on hand to support decisions about the best timing for Strategic fit and feasibility the deal, taking into account what There are two crucial contextual future value creation will look like questions to be asked as the value as well as considering the impact of review begins: What is the potential capital market and industry cycles. of a particular business unit to create real, defendable value? And Best owners/transaction is that value being maximized in models the current corporate structure, or Not every potential bidder will be would a different owner do better? the ideal owner of the asset being prepared for sale. BCG has wide BCG’s experts can help clients see experience not only in determining the business rationale for divesting the best fit for both seller and a business and quickly get a divesting asset but also in assessing sense of how feasible a divestiture the right way to package and

8 | SELL-SIDE SUCCESS present to investors and gauging which transaction models seem bcg adds value to the pre- best suited to the deal at hand. deal stage in these ways: • Assessing the strategic fit of Pre-deal improvement potential buyers. Several months before stepping We understand what drives various on the sell-side stage, it is time bidders’ appetites and how they to start putting a shine on the compete against each other (and will asset. This pre-deal improvement compete for the seller’s asset). stage is crucial: the seller must be able to demonstrate the • Gauging the impact of the impact of potential improvements valuation. by the time potential investors Our pragmatic, proprietary StratVal tool review the business plan 6 to translates strategic assessment into 12 months later. To put it in capital-market reactions. real numbers: given average transaction valuation multiples • Identifying the best packages. of eight to ten times EBIT, a $10 For instance, helping with the decision million pre-deal improvement of about what to sell as a package and an asset’s operating profit will net what to sell singly, and weighing $80 to 100 million for the selling complexity against deal security, timing, shareholders. and the risk of spurring competition for the asset sale.

• Evaluating the carve-out complexity. We ensure that clients have a clear picture of the differences in deal complexity and concomitant costs.

• Getting the timing right. We identify the best exit time in terms of the product life cycle, internal growth opportunities, the economic cycle, the asset’s relative valuation to peers, and more.

• Initiating pre-deal improvements. We review both top- and bottom- line potential and define a credible improvement roadmap focusing on quick wins that will be very visible to potential investors.

BOSTON CONSULTING GROUP | 9 real deals—real results

bcg helped thyssenkrupp determine the optimal exit route

ThyssenKrupp needed to deleverage quickly following the 2008-2009 global economic downturn. Specifically, the industrial giant had to free up capex in order to expand its technologies businesses. Its Inoxum subsidiary was seen as having appeal for buyers looking for consolidation opportunities in the stainless-steel industry. The challenge? Inoxum had a history of highly cyclical underperformance.

BCG advised the ThyssenKrupp divestiture team to opt for a “dual track” approach to the spinoff of Inoxum. The rationale was compelling:

• Both options held open for the complete exit process • Value maximized as IPO option increased competitive tension for interested buyers • Work streams strongly overlapped

BCG supported ThyssenKrupp’s spin-off team every step of the way:

We provided end-to-end support from the initial portfolio review, during the joint business plan development, throughout the management presentation and Q&As, and right up to the deal signing.

10 | SELL-SIDE SUCCESS real deals—real results Unlocking the value From Carve-Out to Execution of the Deal bcg helped thyssenkrupp BCG recognizes that there are many different paths to value through determine the optimal divesting–and many different types of buyers and sellers. So we tailor our exit route services to every client situation. Here are two ways we do that:

• Vendor assistance. This is • Vendor due diligence. This the “full service” offering approach is best suited to that includes everything from situations where single assets carve-out support and joint with straightforward equity development of the business plan stories are being spun out by to the equity story and marketing very experienced sellers such as materials, deal execution support, private equity firms. What BCG and process management office provides is an outside-in review of support. Comprehensive vendor the existing management plan— assistance is ideal for complex looking at the plan through the exits where the seller is looking eyes of an investor. Specifically, for high transaction security, even we help to validate the market if the auction field is diverse and dynamics, the company strategic and financial suitors are positioning, and the strategic among the bidders. management plans.

First, let’s examine our “full service” offering in more detail.

BOSTON CONSULTING GROUP | 11 Carve-out bcg adds value during Carve-out preparation lays the preparation in these ways: foundation for successful business • Developing a carve-out divestiture and effective post- blueprint merger integration. A carve-out We pinpoint the capabilities is often necessary because not and constraints of the carve-out all functions that are required in asset (for instance, can it still a stand-alone entity are available fully utilize its production and within the asset to be sold. Three logistics network if it is separated key aspects need to be considered from the parent?); clarifying its when preparing a carve-out: future relationship to the seller by ensuring that the separated entity developing appropriate commercial has the resources needed to stand terms, including a transition alone; business relations with the services agreement and service- former parent, such as redesigning level agreements; and sketching the contractual relations of the out a go-live roadmap showing how separated unit; and legal concerns full-time employees will migrate such as pension commitments and to the new organization, how IT tax issues. support will make the transition to the new entity, etc.

• Creating a standalone P&L We quantify the economic impact of the carve-out (for example, the current charges for IT within the parent versus building up IT capabilities if the asset were a stand-alone).

12 | SELL-SIDE SUCCESS Supporting Management through the whole process

Companies start their divestments with good intentions, but often underestimate the amount of effort and resources needed throughout the process. Many times, management’s attention is diverted to completing the deal—at the expense of running the business. One way to avoid that is to set up a dedicated project office that acts as a central coordination function for the deal.

BCG helps management teams in these ways:

• Providing hands-on support to the client during an intense sale process

• Assisting with content development in the data room and during the Q&A process

• Facilitating timely communication among all relevant parties in the company without disturbing day-to-day operations

• Helping set up and run process management offices (PMOs) by sharing our extensive experience in many kinds of client engagements— including M&A initiatives

BOSTON CONSULTING GROUP | 13 Business Plan bcg adds value to the business A sound business plan is the plan in these ways: backbone of a divestiture. It triggers • Decomposing the existing investors’ interest, shows future management plan. potential, helps build trust, and We bring an unbiased outside-in view, and helps forestall undervaluation. It is break down the existing management plan crucial that the plan is consistent into its key assumptions, revealing potential on every level–from regional to concerns through the eyes of an outside global--and across all budgets investor. and strategic plans. It must be validated, investor-proof, and • Readying the management team bottom-up; it must proactively for its roles in the sale process. factor in the upsides for the This includes helping them rehearse for the potential new owner and align the required presentations. market environment positioning with the assets’ strategy and with • Uncovering hidden value reserves. management’s insights into their Working jointly with the client, we products and markets. conduct workshops to uncover previously neglected top-line potential and operating BCG helps develop business plans improvements that could be realized with a on-site, jointly with the client, new shareholder. through our network of industry experts and 360-degree market • Increasing investor confidence. interviews, and by drawing on We translate the asset’s strategic position, business operations insights and product portfolio, and regional growth taking into account investors’ ambitions into a quantitative bottom-up perspectives. The emphasis on business plan that is fully aligned with a sound business plan is all the developments in the market. Operational more important because many to- improvements and market entry strategies be-divested assets are previously included in the business plan come with a neglected ‘corporate orphans’ step-by-step implementation roadmap and that have not been invested in a sound proof-of-concept. recently, and they might not have had the means or the management • Laying the groundwork for a sound attention to make the most of their equity story. potential for creating value. BCG We ensure that both the parent’s executives can help reveal the hidden potential and the asset’s management team feel in those assets, anticipating what comfortable with the final business plan a private equity firm or other buyer and that operating developments for each would do to optimize the asset’s product line and region are what ultimately value. drive the financial outlook.

14 | SELL-SIDE SUCCESS Equity Story and bcg adds value to the Marketing Materials story in these ways: Creating maximum value • Working jointly with the asset’s for shareholders requires management team. demonstrating maximum value By the time we draft the marketing for potential buyers. By creating materials, we already know the a detailed equity story, the seller asset inside and out because helps potential buyers move we have developed the business beyond the historic financials to plan in collaboration with the understand the true potential of management team. the business. BCG helps sellers craft convincing equity stories that • Bringing extensive experience reflect the market environment, with financial and strategic the company’s situation, and buyers. investors’ preferences, all centered Our longtime experience on both around the jointly developed sides of M&A deals means that business plan. We help prepare the we are intimately familiar with teaser, information memorandum, the approaches and work styles of management presentation, and many types of buyers, and their potential roadshows, all based on a investment criteria. compelling overarching equity story.

• Knowing what works and what doesn’t. Again, our decades-long track record with M&A ensures that we understand the success factors and pitfalls typical of divestitures.

• Striking the right balance of perspectives. We translate management’s often operational view of its products and growth ambitions into the quantitative financial impact that investors are looking for.

BOSTON CONSULTING GROUP | 15 real deals—real results

bcg helped gsk craft a sound business plan for exiting ribena and lucozade

Following a strategic review, GSK announced that it would divest two of its iconic consumer drinks brands in April 2013. Lucozade and Ribena were no longer a fit with GSK’s portfolio, since the company was focusing its core health operations increasingly on emerging markets, where both brands are relatively weak. Selling these brands was also intended to help streamline delivery of GSK’s late-stage pipeline of pharmaceuticals and vaccines.

Delivering a sound business • Ran a ten-week commercial VDD plan was a key milestone for the and upside assessment reviewing successful sale: Ribena and Lucozade’s market • The plan had to demonstrate the opportunities outside their brands’ successful turnarounds in heritage home markets—for home markets. example, in Africa, where almost • It had to provide an attractive no external market data was growth story, describing available opportunities beyond home • Developed and quantified the markets. impact of operational • It had to factor in the assets’ improvements from optimizing stand-alone operations. the supply chain and manufacturing footprint BCG fully supported GSK • Supported GSK during management in preparing an presentations and Q&A investor-proof business plan: sessions with strategic bidders

16 | SELL-SIDE SUCCESS real deals—real results “We love these brands, we think we’ve done a terrific job, but there are other potential owners able to generate greater value with a bcg helped gsk craft a better distribution footprint.” sound business plan for exiting ribena and lucozade — Sir Andrew Witty, CEO of GlaxoSmithKline

BOSTON CONSULTING GROUP | 17 Deal Execution Support bcg adds value to the deal Strong performance on the home execution phase in these stretch, by applying Q&A and ways: expert sessions and site visits, • Coaching management in all prevents last-minute discounts forms of presentation. and bidder withdrawals. Our We understand how important it deliverables include support for the is for the seller’s management to seller’s negotiation strategy along present their arguments cogently with preparation of key documents and confidently, so we bring in and supporting materials for expert communications experts to help sessions and the Q&A process. our clients’ top executives rehearse At the same time, we enable our for every situation in which they clients to come out strong during will have to present their messages. the final deal term and price negotiations, providing supporting • Participating in expert sessions arguments and assessing bidders’ on market developments. synergy cases and their respective We are a knowledgeable voice price potential. in the room when the discussion is about key market trends and the asset’s consequent strategic positioning.

• Leveraging potential buyers’ bids. We proactively develop bidders’ upside cases and help our clients anticipate bidder-specific synergies that they can use during negotiations to maximize price.

• Providing the appropriate economic arguments. We leverage BCG’s understanding of markets and economies to provide strong support for our clients’ positions

18 | SELL-SIDE SUCCESS Now Let’s Look at the asset’s competitive position “Vendor Due Diligence” and prospects for future growth, Path for Other Types of as well as the potential risks Sales: and concerns. The VDD boosts For many clients, the end-to- buyers’ confidence and provides end support across the entire the prospective purchaser with exit process may be exactly what an independent opinion on the they need to handle complex asset and the divestiture overall. carve-outs in markets where it It quickly provides a sense of is not straightforward for buyers the strategic fit and the asset’s to identify how the asset adds upside, beyond just “business as value. For others, though, the deal usual.” In addition, buyers receive involves the sale of a single asset a clear conceptual framework for with a straightforward equity story. consideration of the business, That’s typical for deals done by quantitative answers to “what if” private equity firms. For those types questions, and a story based on of transactions, BCG offers what facts. we refer to as vendor due diligence bcg adds value to vendor (VDD). due diligence in these ways: Our starting point is that a robust • Providing comfort to prospective business plan already exists. buyers. BCG helps to pressure-test that The VDD report provides a plan. We take on the role of an 360-degree validation of the external challenger, decomposing management plan, as well as the plan into its key assumptions guidelines for how to steer the and quickly presenting areas purchase of the asset. that a buyer will feel comfortable with. But we also expose areas • Seeing things from the future of potential concern: growth buyer’s perspective. ambitions that are not backed by Our proven approach, tested in underlying market fundamentals, numerous buy-side assignments, for example, or hidden pockets of clearly reveals how upcoming buyers potential growth—possibilities that will look at the asset. hitherto have been neglected in the business plan. • Giving the seller a head start. The final VDD report will serve as the The primary outcome of the VDD basis for all transaction documents report is a validated outside-in such as the teaser, the information management plan that considers memorandum, and the management market attractiveness and the presentation.

BOSTON CONSULTING GROUP | 19 “The sale of the health care business is part of our long term strategy to maximize shareholder value. The Pharmaceutical Devices and Prescription Retail Packaging divisions represent the majority of the value of our health care business. Following the sale of Health care, we will be a focused beverage cans business with a strong financial position.”

— Graham Chipchase, CEO of REXAM

20 | SELL-SIDE SUCCESS real deals—real results

bcg provided VDD to REXAM in the sale of its health care business

When REXAM’s investment-grade noncore health care and personal credit rating was in jeopardy in care businesses. 2009, the multinational packaging company issued equity via a Step one was to create buyer rights issue and cut its dividend confidence with a detailed and to pay down debt. Although tangible business plan. When the this decisive move successfully BCG team came on board, REXAM restructured REXAM’s finances, already had a well-constructed plan it came at the expense of in place. To create buyer trust in the shareholder value. Acknowledging plan, it was of the utmost importance this challenge, REXAM’s board that the business plan was absolutely opted to focus on its core business solid, linking a robust financial model of producing cans for beverage with detailed operational measures makers such as AB Inbev and and a compelling regional growth Coca-Cola. That meant finding story that factored in the asset’s other owners for the company’s strategic positioning.

BCG added value to REXAM in these ways: • Pressure-testing the management plan (by bringing into play its buy-side experience as well as its industry insights, the BCG team challenged the existing management plan through the eyes of a financial investor) • Providing market and strategic reviews of the health care business’s growth ambitions • Supporting the development of an operational turnaround plan for one of the operating units and initiating progress reports so buyers could follow the achievements so far, and plot a future trajectory with clear-cut milestones BOSTON CONSULTING GROUP | 21 BCG + Investment Bank = Valuen

Don’t think of it as either/or—either advice from your investment bankers or from M&A consultancies. Each has a crucial role to play in adding value to your divestiture deal.

BCG’s M&A advisory service complements what the banks have to offer; our on-the-ground team ensures more effective fulfillment, provides the right levels of advice on industry specifics, gives realistic perspectives on deal synergies, and helps with well-paced phasing of the deal process itself.

We have a long track record of highly successful collaborations with investment banks and financial advisors in both corporate and private equity transactions. In fact, it’s not uncommon for investment banks to recommend to their divesting clients that we support them with deal execution. The savviest deal-making companies appreciate having a good balance of strategic and financial advisors on their teams.

BCG I-bank Teaming experience

· In-depth assessment of · Market sounding market attractiveness · Initial approach of Business plan · Bottom-up business potential buyers OUR M&A ADVISORY SERVICE IS phase plan incl. synergies COMPLEMENTARY TO I-BANKS · On the ground team working closely · Prepare management · Prepare information with management to develop bottom- Preparation and presentation memorandum and teaser up business plan indicative bid · Vendor due dilligence · Bidder and process · Review IM mangement · Advising on industry logic phase and realistic synergy case

· Prepare expert sessions · Data room handling WE ARE A WELL-RECOGNIZED · Support answering of and Q&A process mgmt. ADVISOR Due diligence Q&A on the ground · Preparation of financing phase · I-banks recommend us to support in deal execution

· Support controlling · Our clients appreciate the balancing · Red data room handling setting up FY accounts of strategic and financial advisors Confirmatory · Q&A process mgmt. · Prepare bidder specific due diligence… · Negotiation advisory until closing! synergy rationale

22 | SELL-SIDE SUCCESS seven principles of great divesting

So what does a successful divestiture look like? BCG’s extensive sell-side work reveals seven core principles that apply regardless of a company’s motives for selling: ❶ Tamp down the emotion Decide objectively and in line with your strategy, and base divesting decisions on a thorough portfolio review ❷ Know the value of the business for sale Both for you as well as potential buyers ❸ Time the deal right Figure out what drives the industry cycle and be prepared to benefit from the right timing for the deal ❹ Ensure that you are working with a strong pool of potential buyers All of those on the list must be serious, credible, and have the right motives for acquiring your asset ❺ Tell a clear and compelling business story Ensure that the narrative of the deal makes it clear and comprehensible to all types of potential buyers. Ensure that the potential for value creation comes through loud and clear ❻ Set up a command center Run divestures professionally and systematically ❼ Communicate clearly, promptly, and frequently Inform your shareholders and your employees early on and keep them informed about the deal; never let market speculation drive the story of the deal and don’t let uncertainty cause unrest in your workforce

BOSTON CONSULTING GROUP | 23 Meet Our Team BCG’s experts represent a rich and diverse group whose experience comes from solving the key issues faced by companies around the world. For every focus area, we also have local experts who provide pivotal insights into the dynamics of individual markets.

Jeff Gell Dr. Jens Kengelbach Jesper Nielsen Managing Director and Senior Partner, Managing Director and Senior Partner, Managing Director and Senior Partner, Global Head of M&A and PMI Global Head of M&A BCG Transaction Center Europe BCG Transaction Center America BCG Transaction Center Europe London Chicago Munich Jesper Nielsen leads BCG’s M&A Jeff Gell is the Global Leader of Dr. Jens Kengelbach has led and post-merger integration topic in BCG’s Transaction and Integration some of the largest sell-side Western Europe, South America, and Excellence Topic. He has authored transactions in the recent past Africa. He has extensive experience many award-winning pieces on the and specializes in difficult sell-side in M&A across the life cycle from topics of M&A and value creation. and buyside situations. divestiture, commercial buy and [email protected] [email protected] sell-side due diligence and synergy assessment to post-merger integration. [email protected]

Patrick Staudacher Daniel Friedman Ketil Gjerstad Managing Director and Senior Partner, Managing Director and Senior Partner, Managing Director and Senior Partner, BCG Transaction Center Europe BCG Transaction Center America BCG Transaction Center Europe Munich Los Angeles Oslo Patrick Staudacher Leads BCG’s Daniel Friedman leads BCG’s Ketil Gjerstad has worked M&A and post-merger integration Transaction and Integration with several consumer retail topic in Central Europe, Eastern Excellence Topic in North and process industries on Europe, Middle East, and Africa. America. He has extensive a broad range of corporate finance He has supported multiple global experience in complex post- topics, with a focus on M&A. integrations across industries. merger integration and large [email protected] [email protected] organization transformations [email protected]

24 | SELL-SIDE SUCCESS Dr. Philipp Jostarndt Dr. André Kronimus Damien Wodak Managing Director and Partner, Managing Director and Partner, Managing Director and Partner, BCG Transaction Center Europe BCG Transaction Center Europe BCG Transaction Center Asia Pacific Munich Frankfurt Melbourne Dr. Philipp Jostarndt has Dr. André Kronimus has Damien Wodak is a core worked with a wide range of worked extensively in mergers member of the BCG Metals & Mining Sector clients, and acquisitions in the US, Transaction Center. He focusing on transactional, Europe, and Asia on both focuses on buy- and organizational, and the buy and sell sides and is sell-side due diligence, strategic topics. active in several large carve- portfolio improvement, [email protected] out initiatives. and corporate transactions. [email protected] [email protected]

Jean Le Corre Decker Walker Kim Thomas Managing Director and Senior Partner, Managing Director and Partner, Partner and Associate Director, BCG Transaction Center America BCG Transaction Center America Transaction & Integration Excellence, São Paulo Chicago BCG Transaction Center Europe Jean Le Corre has supported Decker Walker has extensive Copenhagen the sell- and buy- side of experience in in-depth Kim is an expert in PMI, M&A, transactions involving M&A due diligence, target- carve-outs and divestitures. He South American assets on screening, and designed is Global Topic Leader for carve- domestic, regional and corporate M&A strategy, outs. He has led and supported global M&As. primarily for agricultural and dozens of major transactions [email protected] consumer goods clients. around the globe across multiple [email protected] industries. [email protected] CONSULTING GROUP | 25 BCG’s Transaction Center is the hub of the firm’s global Transaction and Integration Excellence expertise, providing businesses with end-to-end transaction support, including strategic decision-making in mergers and acquisitions, preparing and executing divestitures and joint ventures, supporting IPOs and spinoffs. We create and execute winning strategies for Post-Merger Integration that unlock synergies quickly and build high-performance organizations in order to realize the full potential of deals. The Transaction Center combines BCG’s deep sector expertise with our comprehensive experience in all aspects of Transactions and Integrations. Over the past ten years, we have supported more than 7,000 transactions with a market value of more than $5 trillion. With more than 300 professionals worldwide, we help both corporate and private equity clients execute deals efficiently and more importantly, maximize value.

Contact: Dr. Jens Kengelbach Global Head of M&A | BCG Transaction Center Europe Managing Director and Senior Partner, Munich Tel. +49 89 2317 4312 [email protected] transactioncenter.bcg.com

26 | SELL-SIDE SUCCESS Read All About It Our clients operate in nearly every industry and region around the world, and they come to us for fresh approaches to the issues that matter most to them. Through a rigorous analysis of each client’s individual situation, we develop customized solutions that meet the organization’s specific needs. The case examples here illustrate how we help clients sharpen their capabilities, create value, and deliver sustainable advantage.

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28 | SELL-SIDE SUCCESS Articles and Reports

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How Bold CEOs Succeed at M&A Turnarounds For leaders with strong transformation experience, a slowing economy can be an opportunity to buy troubled assets at a discount and create value by turning them around.

Lessons from Eight Successful M&A Turnarounds When a company buys an underperforming asset, it needs to make improvements and start creating value on day one. These acquirers show how it’s done.

The 2018 M&A Report Synergies Take Center Stage Dealmakers seeking to convince their board and shareholders that an acquisition creates value have a clear imperative: prove that synergies justify a high valuation.

BOSTON CONSULTING GROUP | 29 Articles and Reports

2018 Value Creators Report 20th Anniversary Edition When it comes to achieving superior performance over the long term, the firms topping BCG’s Value Creators rankings have perfected the art.

30 | SELL-SIDE SUCCESS Deals That We’ve Helped Happen

2019 2018 2018 2018 2018

divesting their drinks and hospitality business selling their European generics divesting their drinks sold a minority stake in its business Zentivat o business to solar energy subsidiary

Comprehensives upport for Strategic advisor Strategic advisor Strategic advisor Strategic advisor carve-out/carve-in to the seller to the seller to the seller to the seller of energy businesses AUS$10B €1.9B €4.6B $174M Value not disclosed

2018 2018 2018 2017 2017

selling their Consumer Health (OTC) business to divesting their heat pump business (Thermia) to

Strategic advisor Strategic advisor Strategic advisor Strategic advisor Strategic advisor to the seller to the seller to the seller to the seller to the seller €3.4B Value not disclosed Value not disclosed €8.0B €21.8B

2017 2017 2017 2017 2017

sellingi ts S&IP business to divesting their oil & gas business Sale of restaurants in the Nordics Provided support on Developed and implemented a privatization program as part of privatization program for the Strategic advisor to seller Strategic advisor Strategic advisor government 2030 strategy sovereign wealth fund to the seller to the seller

$710M $7.5B Value not disclosed Value not disclosed Value not disclosed

2017 2016 2016 2016 2016

Operational carve-out in Strategic advisor preparation for divestment Strategic advisor Operational carve-out of Strategic advisor in to the seller to the seller generics business spin-off of fossil fuel assets $534M $1.9B $3.0B $38.7B $4.5B

2016 2016 2016

Strategic advisor Strategic advisor Strategic advisor in spin-off of to the seller to the seller cars.com from Tegna $2B Value not disclosed $310M

BOSTON CONSULTING GROUP | 31 “M&A is a proper means of corporate strategy.”

“It should be obvious that our national prosperity depends upon the maximum use of our existing resources and of our capital. National policy should direct funds into the hands of those who can and will invest them in a way to create the most productivity. If takeovers accelerate this process and benefit stockholders, too, then who should protest?”

— Bruce D. Henderson, Founder of BCG

32 | SELL-SIDE SUCCESS For Further Contact To reach BCG’s Transaction Center team regarding insights or potential support, please use the following e-mail address: [email protected].