Maximising return from divestment: Carve out

Failure to evaluate the costs of operational separation and prepare clear terms for transition can risk under-pricing a deal and leave buyers and vendors exposed to significant unforeseen costs. We have experience of carve outs from both buyer and vendor perspectives – and can help to prepare and implement robust, executable and cost-efficient arrangements for carve-out, transition and hand-over.

Our clients ask

• How do I develop a standalone operating model based on my needs?
• How do I prepare separation plans that safeguard the business and ensure the carve-out is fully operational on Day 1?
• How do I quantify the financial impact of the separation (both for the carved out business and for the parent it leaves behind)?
• How do I maximise the operational efficiency of the carved out business and deliver this value through implementation?

How we solve it

Carve-outs are a growing feature of the current deal market. They are by their nature more complex than the sale of a fully standalone business. Our services are geared to making sure the carve-out is as smooth and value-enhancing as possible. We understand the costs, practicalities and potential risks of operational separation. We understand both vendor and buyer perspectives and their impact on the value of the deal.

If you’re a vendor, we can help you to assess the full costs of the carve-out and transitional support and the implications for the expected returns from the deal. We can also help you to anticipate bidder requirements and hence sustain competitive tension in the auction, which can accelerate the deal process and maximise the proceeds. We ensure separation plans can be delivered, that business disruption is minimised and that there is an appropriate and executable level of support during the transition. We also advise on how to make operations more efficient following the separation.

If you’re an acquirer, we provide the same assurance of certainty, and deliverability plus challenge on efficiency through carve out diligence. This includes helping to evaluate and challenge the cost and effectiveness of the transition plans and improve operational efficiency, both during the transition and as a standalone business.  We will work alongside you to implement these plans effectively.

Related services

• Seeing the bigger picture - Operational due diligence

• Generating value through rapid operational improvement - FasTrack

• Achieving integration success - M&A; integration