Is a hidden gem eluding your portfolio evaluation process? Most companies periodically scan their operations to ensure that they are the best owners and in the process identify businesses that can be divested to raise capital for other opportunities. But these companies typically overlook support services, viewing them instead as cost centers—which focus on cost reductions or outsourcing—rather than as business units ripe for divesting.

The distinction is an important one. In many cases, it makes sense to outsource individual service activities, including commoditized corporate functions (such as finance and accounting, HR, and purchasing), IT functions (the help desk, infrastructure operations, applications management), and industry-specific functions (booking and fare management for airlines, payments processing for banks). Yet when a company aggregates support services into a single unit, it may constitute an attractive business that can be sold outright, with a value greater than that of a five- to eight-year contract for continued support services. The selling company reduces its operating costs, raises capital, and removes assets from its balance sheet. The purchasing company acquires assets, know-how, and perhaps an attractive geographic footprint, as well as a new support services client. Nonetheless, even executives who understand the idea in theory worry that the practical obstacles to divesting—tight credit and a weak market for assets—outweigh the benefits or that the seller will have to pay more for these services after the divestiture.