What path will you navigate to carve-out sale success?

Road map to carve-out sale success

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Getting from sign to close in three months

Congratulations; the deal is signed. Now another phase of heavy-lifting begins. How do you successfully close your carve-out sale in only three months without eroding value or destroying the deal?

Once the carve-out sale agreement is signed, the focus shifts to separating the business from the parent company and transitioning to the buyer – without disrupting operations.

Road map from sign to close: part 2

EY - Closing the deal within three months

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  • Governance
    • Implement governance model
    • Determine the appropriate roles for DivestCo, seller and buyer
    • Implement Day 1 strategy and timeline
    • Leverage technology-based tools
    • Address closing conditions
  • Tax
    • Address issues identified during buyer’s confirmatory tax diligence (as needed)
    • Identify, highlight and true-up tax attributes and modify tax structuring as appropriate
    • Evaluate tax accounting impact of any internal structuring
    • Execute tax structuring, legal entity setup and/or asset transfers
    • Determine how to efficiently repatriate/redeploy cash
    • Calculate potential buyer tax liability/filings
  • Carve-out and deal-basis financials
    • Amend carve-out audited financial statements
    • Analyze balance sheet and plan for post-close activity to avoid surprises and delays
    • Monitor financial results and synergy realization versus forecast to avoid disputes or value loss
    • Provide appropriate level of financial documentation in data room 
    • Plan for closing/post-closing
  • Operational separation
    • Reconfirm current-state operations
    • Execute plan to operationalize new legal entities
    • Finalize Day 1 operating models to close the deal
    • Focus on execution of separation plan to shorten time to close and minimize workarounds
    • Confirm TSA service delivery model
    • Align stranded cost mitigation with TSA exit planning
    • Assign a high priority to closing out works council and union negotiations (as needed/where required)
    • Tailor the communications strategy to each constituent
    • Evaluate Day 1 readiness within 30-45 days of close to allow adequate time to change course