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Case Study

Carving Out a Global Consumer Business & Supporting Day 1 Readiness

Team Size
1 Senior Director, 1 Vice President, 1 Associate
Project Duration
7 weeks

The Situation

A sponsor was carving out a consumer business based in the US, EMEA, and Latin America from a publicly traded global pharmaceutical, medical device, and consumer corporation. No employees were transferring as part of the transaction, and the business relied on the Parent for all back-office functions. The Sponsor engaged Accordion for carve-out planning and execution support, and our team worked shoulder-to-shoulder with the Sponsor to plan the carve-out. Day 1 business continuity was facilitated through an unusual arrangement involving a combination transition business license and services agreement (TBLSA), licensing the business back to the seller for a period while the Sponsor stood up the legal operating entity, and a manufacturing service agreement (MSA).


Carve-Out Planning & Execution

M&A Execution Support

13-Week Cash Flow Forecasting

The Execution

  • Worked closely with the Sponsor to provide critical guidance to identify and negotiate the necessary agreement terms to set up the standalone business for Day 1 success:
    • Immediately assessed the closing and operational standalone requirements to drive the goals for the agreement negotiations.
    • Collaborated with the Sponsor and other advisors to develop a streamlined pre-close execution process to address all requirements for Day 1.
    • Supported the negotiation of the TBLSA and MSA by conducting in depth proposal reviews and providing item-level commentary.
    • Identified key risks and mitigation strategies throughout conversations between the Sponsor, the Seller and the legal teams and assisted the Sponsor to develop a negotiation agenda to address these risks.
  • Developed a roadmap for the Sponsor to use for Day 1 success and beyond, given the time sensitive agreement interdependencies.
  • Conducted regular meetings with the Sponsor to provide status on negotiation process, key milestones achieved, and risk areas requiring decision-making or attention.

The Results

Accordion’s leadership played a critical role in developing agreement terms to set the business up for operational success as a standalone company – without any employees transferring with the business. Our team, in conjunction with legal, developed an appropriate and practical agreement that enabled the company to begin stand-up immediately post-close without disruption to the core business. The engagement was accomplished in an exceptionally tight timeframe in order to achieve the required calendar year end transaction closing.