M&A: Merger Integration

M&A: Divestitures, Spins


Operational Improvement


Carve-Outs, Spin-Offs and Other Divestitures

To improve shareholder returns, companies seek to refine their business portfolios. They are thus facing challenges with both effectively integrating newly formed businesses and with divesting non-core assets and operations.

, which involve the establishment of a stand-alone company through divestiture of a business unit or service line from a parent company, have increasingly become an appealing option with particular relevance in tough economic conditions or during changes in a company’s business model or strategy. The business drivers and execution of a carve-out are often different form those of mergers and acquisitions. Sizing up and rigorously planning the buying and selling of a carved-out business is of strategic and operational importance.

The effective handling of operational separation aspects in Finance/Accounting, IT, HR, etc., and the application of insight and foresight in designing and documenting support agreements during the transition (TSA) are the key drivers we focus on for carve-out success. Key success factors are:
  • Understanding stand-alone and residual costs, entanglements, cross-services and dependencies
  • Structuring and planning the migration of employees and infrastructure
  • Maintaining the relations between parent, entity management and buyer
While somewhat less involved operationally, a spin-off may require less operational separation focus and more financial and legal focus. We assist in the development of practical detailed plans in order to qualify the transaction as tax free and facilitate the overall public offering process.