Dr. Russell F. Henke -- Business Consultant
Case #2 -- Acquisitions & Divestitures
A remote business unit (RBU) within a far larger public company is beginning to lose its identity as other parts of the company are getting all the mindshare (and R&D funds) from corporate headquarters. The RBU manager decides to craft a Business Plan to present to the CEO, but the manager’s initial effort reflects too much of her strong technical background to capture anyone’s attention.
An experienced outside business consultant is brought in to help re-write the Business Plan and to create a presentation for the Board of Directors Meeting only three weeks away. Both the new Business Plan and Board Pitch are done on time. Thus encouraged, the Board authorizes pursuit of acquisition candidates as called for in the new Plan. The consultant helps identify and sift the candidate entities, several with on site due-diligence visits across the country. One final acquisition entity is chosen and recommended at the next Board Meeting. The acquisition would more than double the size of the existing RBU and give it competitive equivalence to its largest external rival, thereby making the RBU an important contributor to the public company’s more sluggish growth prospects.
The same outside business consultant leverages his previous contacts, quickly identifies a buyer, and sells the RBU for cash to an outside corporation with complementary products. A healthy multiple near eight figures, the proceeds are received by the public company a mere six weeks after the last Board Meeting.
