As a redeployment strategy, divestitures can be environmentally friendly. They enable owners of a business to recycle the business to another owner who has different vision, resources and opportunities for achieving growth.
However, as an exit strategy, divestures bundled with earn-out payments pose threats to the seller. Such threats can be mitigated through retention of certain rights and checks and balances. A well-tuned divesture strategy can thus increase the sale price, reduce risks of coming unglued, and attract more competition in an auctions process.
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