Setting up a carve-out for success

Deals - Integration and Separation is one of KPMG’s key propositions, and we have supported multiple clients across many sectors in their respective acquisitions and divestments.

Separations, or carve-outs, are typically complex undertakings that require careful thought and planning on many components. These components  include financials, tax efficiency, legal entity structuring, and perhaps most importantly, operational separation.

Based on our vast knowledge and experience in carve-outs, we have, in collaboration with the broader international KPMG Integration & Separation network, developed a four-part series, “Business in a box”, that examines the key phases of the operational separation process.

Some of the highlights from the first part are listed below.

1. Carve-out have boomed during the last years, e.g., due to increased activity among private equity firms and as companies are increasingly shifting their corporate priorities to highlight ESG topics.

2. Carve-outs are typically more complex than general M&A transactions and are hence associated with many pitfalls related to planning, resourcing, stakeholder management and entanglement identification, among others.

3. Sellers can take action to reduce the risk of an unsuccessful carve-out transaction, e.g., by developing an attractive transaction perimeter aligned with demand on the market, devising a clear carve-out blueprint, and splitting up the transaction execution into stages.