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CARVE-OUTS & INTEGRATIONS

Whether you need support with your planned Carve-Out or you are looking for a partner to help you with the integration of a new acquisitions you have a competent partner in me. Learn more about how I can help you on this page.

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Preparing for the sales process

Preparing for the sales process

carve-out

A Carve-Out is always a special situation for a company. The more integrated the infrastructure of the business unit with the corporate environment is, the more difficult a Carve-Out becomes. This presents two major hurdles.

In most cases the PNL tends to be more straight forward then the Balance Sheet. Once the stand alone PNL is created, it becomes essential to check for over- and under-allocations. Within a corporate structure cost for central functions are often allocated to the business units on a generic basis or the opposite is the case that costs necessary for operating a stand-alone business are kept central. Both distorts the visibility on the true performance of the business unit and need to be corrected for.

In many cases central functions are used by several business units conjointly. This is no longer possible after the disposition or spin-off. An experienced buyer will identify these gaps quickly if they are not considered and use them to negotiate on price. In worst case the carve-out can fail because of this. As this work needs to be performed prior to the announcement and marketing of the spin off, the challenge becomes creating the most accurate presentation of the facts with a selected set of resources in the know. NDAs are the appropriate tool here but become less efficient when project team extends. Once the foundational work has been completed the marketing process starts. A sales catalogue is created in close collaboration with the investment bank, the target prices is determined, and potential buyers are contacted. In the several rounds with potential buyers more detailed analysis are regularly requested. Once a buyer is found the true carve-out process starts. Employees and customers have to be informed, systems and data have to be isolated and migrated. This process has to be done in a coordinated fashion creating stress for the entire staff. During the whole process it is advisable to engage external resources to support the core staff.

As I lead two Carve-Outs, one as the sold entity and one as the seller, I can support clients in the successful completion of these type of projects with my experience. My focus during the Carve-Out is on the operational side. On a strategic level I support in the creation of a Carve-Out plan to fill process- and resource-gaps and determine the required TSAs. I also enable the isolation of systems, processes, and data conceptually as well as on a working level. Let me help you you transform your business!

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Onboarding and

INTEGRATION OF ACQUISITIONS

A Carve-Out is focused on isolation of systems and data and an integration of a new acquisition is focused on the opposite. There are many experts available in the field of deal structuring and closure but very few have the operational skills to drive the integration of the new asset into the daily operations. Most buyers expect their staff to handle the integration next to regular tasks. This often leads to processes being copied one to one to the new acquisition. While this might be the simple solution often this creates substantial tension between core staff and acquired staff. Here an external partner can act as an impartial judge of the process landscape on both sides. Normally three categories arise. Duplicated processes, processes that are unique to the business and should therefore not be harmonized and missing processes on either side.

Duplicated processes on both sides need to be analyzed impartially and the superior process becomes the standard to maximize synergies. Often core processes for the new acquisition are replaced by the corporate standard although they are not suited and thereby substantial compliance and process risks are created. An impartial analysis can help balance between natural resistance of change and destructive standardization. The same is true for missing processes. Not every process needs to be implemented in every business unit. An impartial analysis shows if the process needs to be transferred, kept in the business unit, or maybe even be eliminated to create efficiency. Based on my expertise from numerous integrations, I can be a competent partner for any client.  Let me support you with my experience from countless integrations.

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