CORPORATE CARVE-OUT AND INTEGRATION
We are ideally equipped to assess your environment, help you build the carve-out and integration plan, and work with you through the integration execution process to deliver the required outcomes.
Organizational agility coupled with cost-effective operations is vital for the continued good health of organizations. Having a deep understanding of the market eco-system the company operates within is critical to correctly position the business to best respond to customers’ demands and needs. Often businesses are optimized around internal organizational parameters, which, at best, have no bearing on market conditions and customer responsiveness. Usually, this structure hinders the process of driving customer focus.
OUR DIFFERENTIATORS:
- Relevant P&L experience
- Significant carve-out and integration experience for tier one companies
- Ability to build out actionable roadmaps based on best practice and lessons learned
- Understanding of the critical impact elements, which may be hidden to the naked eye
Evaluating a business’s ability to operate independently post-carve out from its corporate parent is one of the most critical elements in due diligence.
Most investors concentrate their efforts on the upsides or the shared services post-acquisition; however, when a business has spent a long time as part of a corporate entity, many transverse functions become ineffective when it becomes independent.
Carve-out impact examples:
- R&D and engineering
- Supply chain spending power
- Manufacturing
- Aftermarket and service
- Channel to market
- Technology and IP ownership
- Goodwill and the brand
- Synergies and cost-savings with the existing portfolio of the buyer
When a strategic (corporate) or a private equity company acquires a business with the knowledge that it will have great synergy with its existing business integrations, this positions a company competitively during a buy-side auction process.
These hypothetical pre-acquisition synergies become a real challenge to materialize their actual operational upside after the sale. There are many benefits or synergies and gross-margin perspectives in operations or top-line growth through existing sales channels or client networks.
Examples of key areas:
- Integration into the operational footprint
- Vertical integration
- Supply chain spend volume
- Sales network
- Aftermarket network