Separation advisory - Value Found | Value Delivered

Solution

Separation advisory - Value Found | Value Delivered

Divestitures aren’t just mergers in reverse.

Companies sometimes sell a business unit in order to refocus on their core business or to get rid of nonprofitable service or product lines. A separation of this division from the company as whole ("carve-out") is necessary, which can be a very complex task. Deloitte assists with the preparation of operational, financial, tax and legal aspects.

Your challenge

Are you looking for the optimal way to separate a division and get the maximum value from the transaction? Based on extensive experience, Deloitte can advise during the preparation and assist with the realisation of complex carve-out transactions in an efficient manner.

A regular M&A transaction brings with it the necessary challenges; however, the complexity of a transaction increases if there is a carve-out situation.

Operational

The business unit that is to be separated is in many cases integrated with your current business operations (for example, shared services for Finance, IT and HR) and you are looking for the optimal way to separate the business unit and extract the maximum value from the transaction. We can use our experience to help you answer questions such as:

What does the stand-alone organisation look like and what needs to be arranged at what time?
What should you pay attention to before, during and after the carve-out?

Financial

Historical financial data from the carve-out are often incomplete; For example, there is a profit and loss account for the unit for sale but no balance sheet. In such a situation, splitting the financial administration and (properly) allocating sales, costs, assets and liabilities to the activities to be divested can be a time-consuming and complex process. The impact of the split on the cost structure and working capital of both the selling and the carve-out entity must also be carefully mapped out.

Tax & Legal

Although business is leading, tax and legal will be important drivers in carve-out transactions. The carve out and remaining business are often held by the same legal entity which requires legal separation steps. We can assist by designing a flexible and future proof structure in line with the envisaged separation. The proposed carve-out steps are aimed at mitigating immediate tax impacts as much as possible and preserving available tax attributes available within the structure. The carve-out report could ultimately be used by the various (business) stakeholders.

Our solution

As the market leader in carve-outs, Deloitte has supervised the most prominent transactions in recent years. With our knowledge of carve-outs we create maximum value by offering support in the following areas:

  • Defining the scope of the separation perimeter and the complexity of the proposed divestiture
  • Selecting and/or preparing the Separation Director
  • Setting up the separation programme, governance and stakeholder management
  • Working alongside the M&A deal teams to prepare the entities for an operational carve out
  • Preparing a Seller information document and/or operational handbook for the Seller
  • Developing detailed separation plans and supporting the development of solutions and resolution of issues
  • Developing TSA schedules and working with the functional owners to operationalise the services, as well as setting up governance and monitoring approach
  • Advising Separation Directors and key project managers
  • Planning and managing the detailed separation with functional experts and central coordination, and ensuring an issue free Day 1
  • Mobilising and co-ordinating the project teams around a well-structured and managed separation programme; and
  • Managing people issues, change management and separation communication

The Deloitte team brings the required expertise and capacity to supplement and unburden your organization. Well prepared, consistent and solid information contributes to a smoother process of a carve-out transaction.

Why Deloitte?

Maximum realisation of the sales value, minimal transition risks and effective addressing of lagging costs as a result of the carve-out transaction, by:

  • Ensuring clarity of scope and target state vision
  • Enhancing discipline and control through content-rich, knowledge-based programme management
  • Reducing risks and issues, by staying ahead of the issues and deep experience to support swift resolution
  • Reducing disruption by focusing on people and change managemen
  • Retaining customers and employees through rigorous execution of customized playbooks; and
  • Reducing stranded costs by confirming SG&A details don’t fall between the cracks

Contact

Jasper de Grauw

Jasper de Grauw

Partner

Jasper begint in 1992 bij de Audit praktijk van PwC. In 1999 stapt hij over naar Transaction Services waar hij vanaf 2001 zich specialiseert in post merger integration en complexe ontvlechtingsvraagst... More

Justin Hamers

Justin Hamers

Partner

Justin, werkzaam sinds 1999 in de auditpraktijk, stapt in 2005 over naar Transaction Services en wordt in 2014 Partner. Hij bedient voornamelijk grote Corporate cliënten en heeft een brede ervaring me... More

David Janmaat

David Janmaat

Partner

I am the Mergers & Acquisitions Offering Leader in The Netherlands. I joined Deloitte in 2006, and have extensive experience providing advice and challenge to executive/senior management in planning a... More