Scores of companies look to carve-outs to enhance their competitive position, streamline operations and create value for shareholders. But for those sales to be successful, it’s vital that leaders grasp the complexity and scale of the required financial information. Early consideration of these factors can help businesses prepare for a diverse buyer pool, enhance transaction execution and ultimately increase carve-out value.
According to our January CEO Pulse Survey, 53% of US chief executive officers are considering divestments, spin-offs or initial public offerings in 2025. However, many companies undergoing a carve-out sale process underestimate the importance of early and comprehensive financial planning for a carve-out sale. Prioritizing this from the start leads to a more holistic financial story of not only the business to be sold, but also for the remaining business post-divestiture.
From our experience, we’ve seen that there are three primary steps that finance teams should focus on to prepare and execute a carve-out sale transaction.
1. Understand the incremental financial information that may be required to facilitate the transaction
Recognizing the complexity and interwoven nature of financial information is crucial to enhance value, expedite the timeline and minimize surprises in a carve-out transaction. Early preparation and alignment across the different workstreams are key to fully capitalizing on these benefits.
In addition to managing ongoing financial reporting for the Parent Company (ParentCo), finance teams will have to address two other separate but dependent buckets of financials as part of a carve-out sale: