For companies considering a strategic separation, a dual-track process—pursuing both a public listing and a trade sale in parallel—can be a powerful way to gauge market value, enhance deal certainty, and preserve exit flexibility.1 By preparing for both paths, companies can test buyer appetite without prematurely committing to a sale, encourage better offers, and adapt as market conditions evolve.
These benefits come at a cost, however. Dual-track approaches are complex, resource intensive, and require careful orchestration. In our experience, companies that succeed with a dual-track approach treat both tracks as a fully committed, parallel effort supported by strategic clarity, disciplined execution, flexible planning, and strong governance. They invest deliberately, manage internal pressure, and exit the dual process at the earliest opportunity.
In this article, we explore when and why dual tracks can be advisable, unpack the trade-offs, and share practical lessons from real-world transactions.
When a dual-track approach makes sense
When preparing for a divestiture, leaders must assess two primary transaction paths: a sale to a strategic or financial buyer and a public listing, typically via an IPO or a spin-off. A sale represents a direct transfer of ownership, while a listing establishes the business as an independent, publicly traded company.
Company leaders, including board members and executive teams, have a fiduciary responsibility to evaluate the relative advantages and risks of each path. The right choice often depends on the specific context of the deal, and making it requires a clear-sighted assessment of valuation potential, execution risk, timing, and strategic alignment (table).
Under certain separation conditions, a dual-track approach may be preferable to a sale or public listing.
| Key attribute | Sale | Public listing | Dual track |
| Asset profile and size: Is the business large enough to stand alone and attract public-market attention? | Manageable for likely buyers | Large enough to stand alone publicly | Large enough to list; potentially suitable for right buyer |
| Valuation potential: How does expected valuation compare across a sale and a listing? | Likely to meet value goals | Public markets are expected to value higher | Valuation gap possible; benchmark or competitive tension is needed |
| Deal certainty and speed: How quickly must transaction close, and what’s level of execution risk? | Faster, clearer exit | Slower, more complex exit | Material execution risk in one or both tracks; sale certainty is critical |
| Market receptivity: Is there strong interest from potential buyers or capital markets? | Strong buyer interest | Favorable IPO or spin-off window | Mixed signals across markets |
| Regulatory and tax considerations: Are there favorable or prohibitive implications? | No major hurdles | Constraints limit sale | Potential complexity of either track warrants optionality |
But there are cases when the right choice is to delay making a choice and to pursue both options in tandem. This dual-track approach allows leaders to preserve flexibility and maximize value up to the point when it’s most advantageous to select one of the two tracks. A dual track is often pursued in the following cases:
- Optionality and competitive tension are important. There may be no clear buyer, particularly for large or complex assets, or public-market receptivity may be uncertain. A dual track allows leaders to test both paths, create competitive tension between bidders and investors, and pivot based on early traction in either path.
- Valuation is difficult to assess up front. Valuation is particularly difficult when there’s a mismatch between public- and private-market valuations. Running both paths in parallel helps benchmark valuation expectations, test market appetite, and validate where the best outcome can be achieved.
- Execution risks are high. Such risks include regulatory hurdles that could delay or block a sale, potential gaps in IPO readiness due to public-market requirements, and the time needed to build required stand-alone capabilities.
Navigating the challenges of dual-track execution
While the strategic upside of a dual-track approach can be considerable, executing it successfully is far from straightforward. Deal and separation teams must be clear eyed about the trade-offs to manage them effectively.
Conflicting priorities, schedules, and opinions
Coordinating two distinct deal paths, each with its own requirements, timeline, and audience, is complicated. Strategic buyers tend to emphasize synergies, integration potential, and cost takeout, while public-market investors are focused on stand-alone growth prospects and long-term margin trajectory. Reconciling these differing narratives, which are often built on distinct investment theses, is a complex and resource-intensive effort.
Timing misalignment is another common challenge. IPOs follow regulatory calendars and market windows, while M&A timelines depend on buyer readiness and negotiation cycles. As a result, teams often face pressure to deliver critical milestones on both tracks simultaneously, despite the fact that the two paths may not align. This can create bottlenecks or force premature commitments.
Layered on top are conflicting stakeholder preferences. Advisers, boards, and executives may diverge in their preferred outcomes, shaped by incentives or past experiences. These differences in opinion can create friction, particularly when it comes to prioritizing resources and making irreversible decisions, such as hiring, system investments, and customer announcements.
Stressed talent and sunk costs
The dual-track approach can create intense internal pressure. Senior leaders are expected to lead business performance, run two transaction paths, and prepare for different degrees of separation all at once. IT teams may need to plan for both system carve-outs and data migration. Finance teams must build both IPO-grade financial statements and buyer-oriented diligence materials. Fatigue, burnout, and talent attrition are real risks.
These aren’t just financial costs; they can create organizational dissonance and inefficiencies after deal close. For instance, companies may need to move quickly to recruit public-company talent, such as a CFO with public-company experience, an investor relations lead, and an independent board with governance credentials. Similarly, they may have to launch stand-alone functions in finance, HR, or legal groups, despite the fact that a strategic buyer could absorb them through shared services or transitional agreements.
Six ways that successful companies overcome dual-track challenges
A global agriculture company committed to planning for a public listing of a major segment while simultaneously running an auction process for the asset. Executives held monthly go/no-go checkpoints, assessing progress and evaluating the continued viability of both paths regularly. By advancing both IPO and sale tracks in parallel, the company preserved flexibility and created deal tension. The credible IPO alternative strengthened its negotiating position, while the rigor of public-listing preparation signaled execution readiness with a well-defined separation perimeter and plan. As a result, the company was well informed and well positioned when it entered negotiations. Only after signing the sale agreement did the company pause IPO efforts and move fully into separation execution.
The company’s approach was a good example of following six best practices that we’ve observed across successful dual-track initiatives in multiple sectors: begin with strategic clarity, focus on excellent process execution, be thoughtful about spending and speed, take care of the people, align internal and external messaging, and exit the dual track as soon as possible.
Begin with strategic clarity
Following a dual-track approach isn’t a default. It’s a choice made after aligning leadership around the goal (whether value maximization, speed, or strategic control) and accepting the trade-offs.
Sometimes the choice to pursue a dual track is made early. Other times, companies receive inbound inquiries from interested buyers after announcing a strategic review or an intent to separate, which sets them on a dual track. In many cases in which a company pursues a dual track, one path serves as the primary objective and the other as a credible fallback. In these situations, the deal is structured to be executable through either path, typically within a defined window. The seller often prepares the asset to meet the more demanding standards of the public market (typically through an IPO or spin-off) while maintaining readiness for a potential sale.
Focus on excellent process execution
Early-stage governance is critical for a dual-track approach. The most effective leaders align on key decision criteria (such as valuation, certainty, and stakeholder priorities) and build structured forums to revisit the path as conditions evolve. A shared project management office (PMO) then coordinates both tracks, aligning workstreams, owners, and milestones to avoid duplication and ensure disciplined execution. Such companies develop early materials with both investors and buyers in mind.
Successful companies also make strategic use of nondeal road shows (NDRs)—early investor meetings that test market interest and messaging ahead of a formal IPO. These efforts follow a public disclosure of a company’s strategic intent, which enables transparent dialogue with investors and helps safeguard compliance with securities regulations. Insights from NDRs, combined with due diligence insights and early M&A offers, help refine companies’ positioning to both audiences. This integrated approach gives companies the flexibility to adapt as conditions evolve and strengthens their negotiating position on both tracks.
Be thoughtful about spending and speed
The best teams assess their investments in the dual-track approach pragmatically. They defer nonessential IPO spending until confidence is higher. They actively plan scenarios, building fast-track and pause options to keep both types of deals alive without overcommitting too early. At the same time, they’re willing to invest boldly when the upside justifies it, recognizing that the right preparation can enhance deal value.
In an example of a company that invested heavily, a global pharmaceutical company spent over $1 billion on a dual-track approach. It favored a spin-off as the preferred path, believing that the option would unlock greater long-term value than the other. But recognizing a spin-off’s execution risks, the company also maintained a credible sale option as a backstop.
The billion-plus dollars, spent over several years, enabled full public and stand-alone readiness. The path was longer and more costly than a sale, but created considerable incremental value by improving margins, increasing growth, and delivering a substantially separated business before the spin-off. Ultimately, investment in the more complex path was worth it to deliver a substantial return to the company’s shareholders through the spin-off.
Take care of the people
Running two processes while maintaining business performance and preparing for separation puts enormous pressure on teams. Successful companies assign dedicated leads for each path, use integrated PMOs to coordinate work, reduce duplication, and actively monitor morale. Burnout and attrition are real risks that, if unaddressed, can delay execution or degrade deal quality. To mitigate these risks, leading companies design a transaction structure with realistic workloads and prioritize recognizing individual and team contributions (which is especially important when considerable time and effort is spent on a path that’s ultimately not pursued).
Align internal and external messaging
When navigating the ambiguity of a dual-track process, winning companies ensure that their internal and external messages are aligned.
Internally, it’s essential to be clear about what’s happening and, to the extent possible, about how future decisions will be made and communicated. Leaders don’t need to promise certainty, but they do need to reduce confusion by being transparent about what’s known, what’s being evaluated, and what employees can expect in the months ahead.
Externally, inconsistent messaging can erode trust, raise questions about strategic direction, and even affect valuation. This is particularly true if investors sense dissonance between what’s said publicly and what seems to be happening behind the scenes. Trusted advisers can play a role in this phase by pressure testing valuation expectations, preparing investor-ready materials, and helping leaders craft a coherent, flexible narrative that supports both tracks.
Exit the dual track as soon as possible
Cross-functional teams meet regularly and use inflection points (such as nonbinding offer reviews and prefiling milestones) to decide whether they have the valuation tension, execution certainty, and strategic alignment to proceed down a single path. They have a clear go/no-go decision point and make a deliberate choice as soon as they can determine which is the best choice.
Preserving optionality during a strategic separation isn’t about keeping doors open indefinitely; it’s about earning the right to choose by doing the hard work to make both public-listing and sale paths viable. Leaders who succeed in using the dual-track approach know that this isn’t a passive strategy. It requires early alignment on what “good” looks like, deliberate investment in both narratives, and the stamina to navigate complexity without losing sight of the goal.
