CIMA F3 Syllabus D. Business valuation - Sell-offs - Notes ^{8 / 11}

A Sell-off

is a form of unbundling involve disposing the non-core parts of the company

• involves selling part of a company to a third party for an agreed amount of funds or value

• This value may comprise of cash and non-cash based assets.

The most common reasons for a sell-off are:

1. To divest of less profitable and/or non-core business units.

2. To offset cash shortages.

The extreme form of sell-off is liquidation, where the owners of the company voluntarily dissolve the business, sell-off the assets piecemeal, and distribute the proceeds amongst themselves.