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Forced divestment or strategic opportunity?

A carve-out can maximize deal value and business advantage through focused approach and extensive planning

Corporate divestment is a complex process of carving out the target entity from the parent, especially where there are significant interdependencies between the entity being divested and the parent, or the divesting entity. Companies can drive significant value by adopting a systematic approach to identify all interdependencies and develop and implement a robust carve-out action plan.

Contact us

EY - Naveen Tiwari

Naveen Tiwari
Partner and Head – Post Merger Integration Practice
EY LLP
+ 91 22 61920550

EY - 43% of companies are planning to divest in the next two years
EY - 55% say changes to the technology landscape are influencing divestment plans
EY - 47% say lack of focus and resourcing caused value erosion in the last divestment

What is the secret to a successful carve-out

The key to success or failure of a carve-out is dependent on the level of preparation and readiness of the stakeholders from both the buy-side and sell-side. A focus on value drivers early on in the transaction, combined with a disciplined, agile and sustainable carve-out approach increases the likelihood of success

Client benefits

Organizations are realizing that divestments can be a growth tool and can be used to re-allocate assets and resources to focus on core competencies and strengths. Some of the key benefits that organizations achieve from divestment are:

  • Increase in shareholder returns
  • Focus on value propositions that are closer to the core competencies of the firm
  • Prioritize resource allocation based on business requirements
  • Divest a non-performing asset(s) and/or reduce debt
  • Address any shareholder and market concerns
  • Meet regulatory and compliance requirements

Key considerations for buy side and sell side for a successful carve-out

EY - Key considerations for buy side and sell side for a successful carve-out

How EY can help?

EY provides end to end support to clients across all the stages of a carve-out lifecycle. We leverage our deep sector and functional expertise which has been built through multiple engagements across sectors to bring significant value to our clients.

EY - How EY can help

Our Approach

EY has a tried and tested five step methodology which is designed to maximize deal value during carve outs. We assist clients in conducting due diligence, identifying all the dependencies, drafting an execution roadmap and setting up a program management office to execute the carve-out efficiently and effectively.

Case studies

Read how EY is helping clients realize these benefits

Case study 1

We provided carve-out and TSA support to a PE fund acquiring a consumer products company

Learn how

Case study 2

We managed the end-to-end carve-out and integration of an Indian technology business with that of a US based technology business

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