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August 9, 2021

A divestiture is one of the hardest deals to execute. Especially if you are the one divesting the business. It can get very complicated and you need a lot of experience for everything to go smoothly.  Rhonda Rein, Director, Corporate Development at Thomson Reuters, has executed over 40 divestitures in her career. In this article, we discuss how she executes divestitures efficiently and effectively. 

“With divestitures, you're starting to disentangle something that's integrated and on paper. It can look simple, but when you start getting into the details it can get very complicated very quickly.” - Rhonda Rein

What Rhonda learned over the years is that a divestiture is not the reverse of an acquisition. It’s more complicated than that. You will always have to learn what is being sold and disentangle it from the parent company. There will be nuances that are specific to that business which you have never dealt with before. Also, carving out a business usually requires TSAs which makes everything even harder. 

Evaluation for Divestiture

For Thomson Reuters, they don't sell businesses. They review their portfolio to find which business is not a part of their core strategy anymore, businesses that are not growing at an optimal speed and could be up for a divestiture. 

Corporate strategies shift all the time and for them, their needle is their customers. Rhonda wants to make sure their customers are getting what they want and need, and with the best quality. The goal of a divestiture is to find a good home for the divested business. She makes sure employees are happy and the customers have a seamless transition. 


After deciding which business to divest, they'll present to the leadership team. Once approved, corporate development will get involved. Then the business will start preparing their financials and business overview.  

For larger deals, they use bankers to manage the sales process, especially if there are multiple buyers interested. As they go deep into the sales process, they start to work on the purchase agreements and the TSA. 

Transitional Service Agreement

According to Rhonda, planning TSAs needs to happen early on. Most business teams don't have experience with TSAs, so it is important to guide them. The first step is to identify what is going to the buyer, and what is not. From those lists, you can start to identify what the buyer will be needing to operate on day one. They need to be as specific as possible because they do not want to stay in the TSA longer than they have to. 

Rhonda’s team does whatever they can to help the buyer be successful. Their mission is to create a successful transition for the customers. They are the ones who will face the consequences if they don't partner well with the buyer. 

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