Global

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  • Type: White paper
  • Date: 9/15/2011

Case study: FS spin off sees seamless separation 

seamless separation
How do you avoid making some of the mistakes that have slowed and derailed so many FS mergers and integration over the years? Here are a few case studies that highlight some hurdles that have been faced and how they were overcome.
Proper planning
pre-empts integration issues
FS spin off
sees seamless separation
Preventing a
culture clash between two teams
Pre and
post-deal
planning

Financial Services companies are usually structured in relatively complex ways. And selling off bits of these businesses is a tough task when the spin off’s central services – such as IT and HR – are provided centrally at group level.


When a US-based international Financial Services organization wanted to dispose of its retail asset management business, it soon became clear some smart thinking would be needed to keep the spin off fully functional until it had had a chance to integrate fully into its acquiring company.


Enter KPMG’s US firm. The firm’s FS M&A experts quickly assessed the situation and advised the parent company to set up a Transitional Service Agreement (TSA) with the buyer. Essentially, the TSA set the terms for the parent company’s continued provision of central services to the spin off for an agreed period after the sale.


KPMG’s experience with TSAs and also with the more challenging aspects of post-merger integration added huge value to the deal and kept the acquisition on track. Specifically, the firm made sure stakeholders understood what was happening during the deal’s different stages, while also developing a governance model that helped senior finance executives identify, report and solve issues as they arose.


Says a KPMG advisor who worked on the deal: “Our expertise meant the company being sold was able to continue to function during and after the transition.”

 

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To learn more, download the full report, contact your local KPMG member firm or email banking@kpmg.com to talk with one of our FS M&A experts.