Scenario #10: Divesting companies is like divesting kids
One of the things I’ve always loved is a good puzzle, and what better time to start a thought exercise than the end of the week?
With that, I present to you is #10:
While the most challenging M&A activities tend to be the strategic purchases due to the number of parts and people being moved to drive the company’s mission forward, we cannot forget about the other type: private equity purchases.
In some cases, they will buy the company outright and trust the underlying people to continue to do their thing (with alterations along the way). However, there are some cases were a particular business unit is being divested into its own company. I cited some examples in the past, and in the news over the last week is the US Dept of Justice proposed remedy with Google to have it divest it’s Chrome browser.
Your challenge: supposing you were going to buy this divested unit, what would be some of the tech considerations you would need to make?
In case you are wondering why a PE would care about this, one of the key things about Chrome is that it is given to users for free, yet how Google has been monetizing it is the crux behind their anti-trust suit. And as the saying goes: There Ain’t No Such Thing As A Free Lunch.
Hit REPLY and share your take. We can compare notes next week.
Have a wonderful remainder to your Thanksgiving weekend if you’re state-side!
cab