Companies shed bigger assets to slash debt, get lean
Live MintCompanies are selling off bigger pieces of their business to slim down and cut debt as the pace of dealmaking picks up. “Even with a higher interest-rate market, we really are seeing sellers get the benefit of shedding their assets to then reinvest in their business and lower their debt," PwC partner Liz Crego said. Several recent divestitures have topped $1 billion, including Vans and North Face owner VF’s deal to sell its Supreme Brand for $1.5 billion, and Clearwater Paper agreeing to offload its tissue business for $1.06 billion. “Companies have to return something to shareholders, or demonstrate that they’re doing something at least," said Brad Haller, a senior partner at the Chicago-based consulting firm West Monroe. Haller leads West Monroe’s merger and acquisition practice, which had been expecting to see divestiture activity heat up this year as companies look for more ways to pay off debt.
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More companies pause deal-making amid market volatility, high inflation
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