Content thumbnail Global Corporate Divestment Study

Portfolio review Companies plan to invest in the Which analytics capabilities do you expect to highest-impact analytics invest in within the next two years? To their credit, many companies recognize this structural Commercial analysis weakness and are planning to address it. Successful 63% companies are increasingly seeing the benefits of 51% using predictive analytics to provide early visibility to Model tax footprint and tax rate the expected performance of each business, as well as 52% greater insight into the expected value of a sale, including 47% associated synergies. A greater percentage of PE firms Predictive modeling expect to ramp up their commercial analysis capabilities 51% (63%) than their corporate counterparts. These capabilities 70% could help companies better understand their competitive Model multiple scenarios positioning and customer trends to better inform valuation 48% and transaction decisions. Predictive analytics, commercial 45% analysis and scenario modeling can also help executives Social media analysis (customer perception) identify what attributes of a deal might attract a broader 11% group of owners willing to pay more for an asset, and when 19% and why they would be willing to pay more. Private equity Corporate Social media is being overlooked Every day, more than 500 million opinions, comments and suggestions are posted on Twitter, with countless more appearing on reviews, blogs and other online forums. These real-time, unfiltered opinions contain a treasure trove of intelligence that can help companies track market trends and extract insight for portfolio reviews. For example, social media analysis helps executives understand sentiment changes about a division, product or service and benchmark them against various business units, specific competitors or entire industries. In addition to traditional metrics, these findings can serve as indicators of future business prospects. Social media analytics can even help companies understand investor opinions if the company becomes an activist shareholder target. Many companies are already leveraging social media analytics for product development. Ideally, these analyses should expand beyond individual business units and into wholesale portfolio reviews, which will help companies compare potential growth across business units and help inform decisions on whether to invest in a business or sell it. Critical analytics capabilities that can provide objective and actionable insights Capability Benefit Commercial analysis Customer segmentation and churn Helps inform the enterprise on customer base, how to influence buying patterns and related impact on forecast Stakeholder sentiment Supports the value story and ongoing revenue and EBITDA Predictive modeling Cost analytics Drives value creation road map relative to buyer synergies; allows for benchmarking on a pro forma combined basis Price elasticity Reveals potential implications of future price changes Workforce analytics Identifies productivity drivers and go-forward impact on EBITDA/value creation Working capital analytics Optimizes working capital; assists in setting closing working capital peg/value creation Tax analytics Details tax cost both pre- and post-close Scenario modeling Tests the impact of various drivers on deal value 14

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