Carve out

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Introduction

A carve-out generally arises from the separation of a business, division or sale of assets (income, related costs, people, assets, processes, contracts, etc.) of the parent company. This occurs, for example, when a company wants to concentrate on the main business activity or wants to raise funds or capital for acquisitions, investments or reduce debt.

PwC has extensive experience and proven methodology in carve-outs and has a multidisciplinary team of experts in areas such as accounting, tax, due diligence, capital markets, strategy, HR and pensions , operations and IT. Moreover, PwC has significant experience in managing the transition office, separation and Day One support to ensure business continuity in sales and operations.

Potential problems

A carve-out situation includes :

  • Disruption of the main business and/or business to be divested.
  • The management team not having sufficient time to manage the disinvestment .
  • Risk of not maintaining competitive tension and losing value.
  • Loss of key employees.
  • “Financial surprises” detected in the due diligence conducted by the potential buyer .
  • Not really knowing what transition agreements a buyer would require and/or not being able to fulfil the obligations under such agreements.

How we can help

  • We anticipate all the requirements in the separation process to minimise the impact on the business, managing all key issues.
  • We present opportunities for the optimisation of the business pre-transaction and maximisation of the exit value.
  • We provide certainty with respect to recurring costs and specific non-recurring costs of the separation.
  • We develop and manage clear, efficient and attainable plans with the adequate level of support for the transition without affecting the business.
  • We analyse the current ‘status quo’ of the operating model to define a new efficient and sustainable model for the separated businesses.

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