Carveouts & Divestitures
Transactions are always complex. Carveouts even more so. When the pressure’s on, we’re ready to move with precision—just as we do dozens of times a year
Realizing value from your carveout transaction requires balancing risk of the separation while optimizing the operations during the TSA period. Otherwise, you risk excessive fees, business disruption and other operational challenges to the new business. That’s where we come in—with deep experience in divestitures and carveout advisory, we roll up our sleeves to make your transaction a success.
Our award-winning M&A carveout consulting team supports more than 60 divestiture strategies and projects every year, ranging from $50 million to $20 billion and spanning industries from software to consumer and industrial products, to healthcare.
Standing up a successful new company requires more than transactional or carveout lifecycle experience. That's why our multidisciplinary teams bring together people with deep industry knowledge, technology skills, and the functional experience combined with the transactional knowledge you need to drive both immediate and lasting progress for the new company. We’re ready to execute the divestiture strategy side-by-side with your team, from diligence to separation execution.
Hear how West Monroe recently collaborated with NTT Data Business Solutions to conduct IT Due Diligence and deliver value for a Private Equity client's chemical industry acquisition by leveraging SAP's software.
Separate 50% faster—and boost your divestiture’s success—with Intellio® Deliver
West Monroe’s Carveout & Divestiture services are powered by Intellio® Deliver, which accelerates your separation timeline, maximizes value, and minimizes the risks associated with complex business separation. Intellio® Deliver is a centralized program management and collaboration tool that comes with industry-specific workplans and real-time reporting—meaning you spend less time planning and more time focusing on a successful separation.
Learn more about West Monroe’s Intellio® suite of assets that deliver results, faster
What We Offer
Carveout diligence
Buy-side carveout
Our trusted M&A transaction advisors will assess key technology and operational risks while highlighting opportunities for growth and value creation following the carveout transaction. We focus on cross-functional and technology entanglements with the parent company. We tap into benchmarks and broad transaction experience to model the standalone run rate and one-time cost to separate, resulting in EBIDTA adjustments for our clients.
Sell-side readiness
Leveraging our vast buy-side and execution experience, we also advise companies when preparing a division, business unit, or asset for sale. Sell-side readiness is key in a divestiture strategy because it benefits the management team in stress-testing their operations and identifying vulnerabilities early in the sales process. Any critical issues identified can either be immediately triaged or incorporated into the divestiture timetable to ensure a clean and effective separation—and reduce the risk of purchase price reductions.
In addition to preparing the necessary due diligence materials we develop a cross-functional standalone operating cost model across people, systems, applications and contracts. This exercise identifies both gaps and cost takeout opportunities, providing confidence in the spin off company’s cost structure.
TSA negotiation experts
Transition Service Agreement (TSAs) is a unique carveout attribute that adds to deal complexity and cost. As the due diligence phase shortens, the timeline to agree to TSAs is a top priority. Successfully navigating TSAs requires collaboration with several stakeholders including M&A advisors, general counsel, and bankers. Our balanced approach ensures:
- Terms and conditions are favorable, including SLAs, technology or asset transfer considerations, and long-term outsourcing or commercial agreements
- TSA schedules are developed by function, with our accelerators and pre-built templates
- TSA governance and escalation processes are agreed upon prior to Day 1
Carveout separation planning
Our proven planning tools and experience can help you expedite the process of building the separation work plans, Day 1 checklists, and TSA governance. So you can be sure that you’ve covered all the bases for getting to Day 1—and beyond.
Divestitures are complicated. That’s why our team will help you plan an airtight strategy for every step of the way so you don’t lose any unnecessary efficiency or capital from the carveout process.
Value Management Office
Traditional merger integration efforts, delivered through siloed functional teams, can sometimes lose sight of synergy objectives. Business cases are often built on squishy data from diligence and teams are prone to distraction by myriad competing priorities during execution. The Value Management Office (VMO) approach takes a different approach. We spend dedicated time refining and enhancing value creation opportunities and tailor the team structure to prioritize the efforts that drive real value, giving you control over your synergy objectives.
Value to Risk (V2R) operating model framework
How should NewCo balance optimization vs. risk mitigation when defining the post-carveout operating model? That’s where we come in with our V2R (value to risk) framework. We define a target operating and capability model for success—including skills, organization structure, operating norms, business processes, technology, vendors, metrics, and culture. Our library of industry-specific target operating models can help you jump-start this process.
Separation management office (SMO) and program leadership
Execute with confidence. Under the leadership of our SMO, you can be sure that you’re using proven carveout program management approaches and processes for tracking progress. Our digital SMO tools and dashboards minimize administrative workload during execution. So you can accomplish your goals with leaner teams.
Technology execution
Leverage modern technology—for example, cloud infrastructure and digital/data platforms—to build an agile, scalable organization from the outset. We use proprietary enterprise resource planning (ERP) carveout data migration tools and accelerators for SAP, Oracle, and NetSuite to rapidly exit TSAs. We also help you identify and establish other core systems you will need for Day 1 and further into the future to support the divestiture strategy—for example, data and business analytics, human capital management (HCM) and payroll, and customer relationship management (CRM) systems. We have a proprietary infrastructure and security reference architecture “in a box” utilizing AWS and Microsoft to accelerate the foundational infrastructure separation.
CORE: Carve-Out Readiness & Execution
Advance your pace of transition with our proven CORE approach. Staffed with true functional experts, CORE provides “practitioner” expertise and interim leadership for key functions such as human resources, finance, cybersecurity, and information technology beyond closing—when many other service providers exit. CORE is designed to consolidate functional areas that typically comprise 60% to 80% of the one-time separation budget following a divestiture. It can reduce the number of vendors required, as well as the program management risks.
With decades of experience in M&A carveout strategy and divestitures, West Monroe can help you wade through the complicated process with the least amount of headaches.
How We've Helped Clients
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