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U.S. companies have a new reason to divest

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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January 23, 2013, 3:12 PM ET

FORTUNE –– Deloitte today will release the results of its 2013 divestiture survey, which polled 148 senior company executives (60% public) on their divestiture plans and sentiments. Around 60% of the surveyed group worked for publicly-traded companies, while 35% worked at companies with annual revenue in excess of $5 billion.

Fortune got an exclusive sneak peek: The headline result is that 81% of respondents said that they plan to pursue divestitures for strategic goals (i.e., pruning non-core businesses), rather than for capital-raising needs or financial distress. That’s up from 68% the last time Deloitte did this survey in early 2010.

“The last time we were coming out of crisis mode, whereas today companies seem more confident in the economy,” explains Andy Wilson, Deloitte’s U.S. leader of M&A and seller services. “But there is still a lot of uncertainty in some sectors – particularly in healthcare and financial services, where regulations or possible regulations are driving some divestitures.”

Wilson does add,  however, that strategic divestitures remain price sensitive. “We saw that one of the main reasons why deals didn’t get executed was because sellers couldn’t get the desired price — so they’re divesting because of strategy, but still want that money.”

The survey also found that sellers would prefer a domestic corporate buyer, although larger U.S. companies are more likely to consider cross-border buyers. Private equity seems to have lost sell-side favor, with only 31% of respondents indicating that their companies “prefer” or “somewhat prefer” domestic PE buyers (down from 42% in 2010). Foreign private equity comes in at just 9%, while sovereign wealth funds bring up the rear at 7%.

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About the Author
By Dan Primack
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