Top strategic goals of M&A transactions are usually achieved on the day the deal is closed or soon thereafter. New markets, new technologies, combined legal entities and expert personnel are immediately and legally made part of the combined organization.
M&A integration is where most transactions fail, especially larger ones. This is counterintuitive and counterproductive as stakeholder value added is in fact the very reason a transaction is undertaken.
To help you succeed, we develop practical guidance through the integration steps, at PMO or functional work-stream level of your transaction. We have decades of experience as practitioners and thought leaders in the end-to-end M&A process as well as in the intricacies of carve-outs.
Planning and Conducting Orderly Transfer of Responsibilities
Structuring Synergy Tracking
Establishing Operational Metrics
Breaking-Up is Hard: Carve-Outs, Spins, 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.
Carve-outs involve the establishment of a stand-alone company through divestiture of a business unit or service line from a parent company. They 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) (sometimes reverse TSAs too, from divestee to the parent) are the key drivers we focus on for carve-out success.
In short, key success factors are:
Understanding stand-alonecosts, entanglements, cross-services and dependencies
Understanding the subtleties of stranded costs
Collecting financial data into the stand-alone company (NewCo) financial statements
Structuring and planning the operational migration of employees and infrastructure
Maintaining good working relations between parent, NewCo management and buyer
Explore integration issues, if any, into buyer's portfolio or platform
A spin-off may require less operational separation focus and more financial and legal focus. We assist clients' Finance and Legal organizations in the development of practical detailed plans in order to qualify the transaction as tax free and facilitate the overall public offering process.