Preparing For a Carve-Out of a Business to Multiple Buyers
A PE-backed Canadian and US based financing and payment solutions provider, comprised of three business segments, needed to recapitalize. Adding to the complexity was the intention to sell the three business segments to three different strategic buyers, thereby eliminating a remaining company (RemainCo) to provide overall separation oversight and TSA management. The Management team and Sponsor engaged Accordion to develop a separation strategy which included standing up the separation management office (SMO) to develop and execute an overall separation strategy, performing an entanglement analysis, and developing detailed TSA schedules.
Carve-Out Planning & Execution
Project Management Oversight
100 Day Planning
- Collaborated with the Management team and functional leads to gain an understanding of respective functions’ workflows and system/software utilization.
- Leveraged our research to develop a separation strategy for each strategic buyer that included:
- An overview of organizational planning (i.e., functions the respective buyer would be gaining in the transaction) that noted where potential gaps would be supported by a TSA.
- A business and financial applications schematic that captured IT entanglements.
- An overview, by function, that detailed Accordion’s point of view regarding the complexity of separation and TSA support (i.e., whether the buyer would be receiving or providing services).
- Developed detailed TSA schedules (i.e., scope, duration, cost) for each buyer by leading discussions with the buyers to understand which services buyer would need.
- Ensured that the TSA schedules included reverse TSAs where a strategic buyer would provide services to another buyer.
- Collaborated with external IT vendors and internal resources to develop and execute an overall system and software separation project plan.
Accordion’s SMO helped guide Management during the pre-sign period by facilitating critical team discussions to develop separation strategies on how the functions (particularly the people and systems therein) will separate and how to operationalize TSAs if all the transactions close and there was no RemainCo. Our separation strategies drove invaluable discussions with potential buyers during the pre-sign period. Accordion was the communication hub for Management – leading the weekly executive steering committee meetings. We created and helped drive the execution of the overall separation project plan, which consisted of at least 10 sub-projects, by coordinating with internal and external resources to drive the end state of three completely distinct businesses.