The sale of Captive Centres, be they standard delivery centres or Shared Services operations, continues to be an increasing trend. The rationale is often similar to that of Outsourcing, essentially: ‘why should I invest in and run an operation that is effectively non-core and non-differentiating, that diverts leadership attention, and requires constant investment and improvement?’; ‘when by selling it to an organisation that specialises in these operations that will invest in it as their core business, and underwrite service performance and cost reduction, I can realise increased benefits.’ And ‘by ‘monetising’ the operation, receiving a cash consideration upfront, the transaction will provide both an improvement in both the P&L account and the balance sheet.’ As some may say ‘result’.
It is a big decision, and there are many things to consider in deciding whether it is the right decision for your organisation. There are equally 4 different approaches to running such a process each with their merits/weaknesses – the right approach will typically be driven by your key objectives.
We are often asked ‘Is there a market for such transactions today?’ And the answer is unequivocally ‘yes’. Indeed for right operation it has arguably never been more buoyant from the perspective of Service Providers competing to buy such operations. There is a clutch of large Outsourcing Service Providers that have strategically made the decision to actively look for such acquisitions and in many cases are sitting on a ‘cash-pile’ such that they can make it happen – quickly.
The key to maximising the value of your Captive Centre sale is to make it as attractive as possible to the bidders – to tick all the boxes in terms of what an Outsourcing Service Provider is looking for – you are ‘selling’ them the vision of what it can be to them.
Let us help you consider whether the Captive Centre sale is the right option for you, and if it is, then let us help you get the most from the transaction. – Talk to us.