Avoid pitfalls by masking information requests.
By William Blandford, Managing Director at Blandford Associates and Member of the Board of M&A Standards
In estimating and planning for a divestiture, it is necessary to gather key data about the business to be carved out, to understand the scope and complexity of the carve-out, develop a sound Transition Services Agreement (TSA), and provide an estimate of the cost of the carve-out.
“Don’t quit your day job.”
This is a common refrain in the M&A world, where people often find that they are responsible for working on a deal in addition to their regular job responsibilities. Indeed, staffing consistently represents a significant challenge for acquisitive organizations. In-house employees often lack experience in M&A, while it can also be difficult to find the right professionals to step in temporarily, for the duration of a deal. This month our Board members offered their advice on overcoming this problem.
While many people have participated in the acquisition of a business, fewer have participated in a carve-out, a type of divestiture where a part of a business is sold. However, as businesses move toward a portfolio-management model, where they are both acquiring new businesses and shedding loss leaders, effectively managing divestitures will become an increasingly important skill.
