What is carve-out?
Carve-Out is a financial operation that consists of splitting up a company’s business and selling it to a third party. This strategy may be motivated by a variety of objectives, such as divesting a non-strategic business, concentrating on core businesses or raising capital. In this context, the involvement of an experienced interim manager minimizes risk, ensures a smooth transition and maximizes the value of the transaction.
What are the different types of Carve-Out?
Carve-Out, a well-known strategy in the business world, comes in several variants to suit different objectives and contexts. Here are the main ones:
- 1
Sale of goodwill: this type of Carve-Out involves the sale of a company’s goodwill to a new entity. This option is often chosen to divest a non-strategic business or one in difficulty.
- 2
Equity investment: in this case, an external company invests in a division or entity of the parent company, while leaving it to operate relatively autonomously. This can be achieved through a capital increase or a merger with a third-party company.
- 3
Assignment of operating rights: this type of Carve-Out is characterized by the assignment of an operating license or patent to a third party. This option enables the company to generate additional income without divesting itself of the asset in question.
- 4
Takeover: the acquisition of a majority stake in a subsidiary by a third party. This option enables the buyer to take control of the business and steer its strategy.
How do you manage these transformation projects?
Careful planning
Identify the reasons and objectives for Carve-Out, as well as the assessment of potential risks and opportunities.
Transparent communication
Employees, customers, suppliers and investors need to be informed of upcoming changes and the potential impact on their activities or their relationship with the company.
Personnel management
Assess the skills and resources required for the division concerned, plan for any transfers or redundancies, and put in place support measures for affected employees.
OptimizationÂ
optimization
This can include restructuring processes, optimizing costs, and adapting IT systems and infrastructures.
Risk management and compliance
It’s essential to ensure that all legal and contractual obligations are met, including regulations on data protection, intellectual property and labor law.
Use an interim manager to manage your Carve-Out
A Carve-Out can be a tricky transition period, with unique organizational, operational and strategic challenges. An interim manager brings not only technical skills, but also the ability to manage change, mobilize teams and ensure effective operational continuity during the transition.
What’s more, temporarily recruiting an interim manager can be a more cost-effective solution than hiring a new permanent executive, especially for a time-limited project such as a Carve-Out.
Save time and concentrate on your strategic activities, with the help of an interim management firm like FAITHFUL EXECUTIVE.
The advantages of working with an interim manager
Working with an interim manager means benefiting from :
- Expertise in managing rapid, complex change.
- This flexibility is invaluable, as he is hired for a fixed term.
- An objective, outside view of your organization to better identify potential problems and propose innovative solutions.
- Help to minimize the risks associated with your project, particularly the risks of failure and delay.
Whatever your needs, trust FAITHFUL EXECUTIVE to help you create and manage your Carve-Out.
Steps to a successful Carve-Out operation
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