What Is a Carve-Out?
A carve-out is a transaction involving the isolation and separation of a business activity or division—typically organized as a business unit—within a larger industrial group.
This type of divestment differs from a traditional sale in that its motivations are not purely financial. While value creation remains a goal, carve-outs often address broader strategic imperatives, such as:
- The need to stop recurring losses or reduce group debt,
- Compliance with antitrust authorities' requirements.
In most cases, the assets involved are no longer considered strategic for the group. Under-resourced in terms of human capital and investment, these assets are often no longer a priority. The aim, therefore, is to divest them quickly while maximizing their appeal to potential buyers.
Unlike a typical sale—which generally involves a distinct and autonomous legal entity—a carve-out is inherently more complex. It requires not only identifying and extracting the assets to be divested but also managing the many interdependencies—operational, IT, financial, and commercial—that still connect them to the parent group. Managing these post-transaction interconnections is what gives carve-outs their specific technical complexity.
Successfully Executing a Carve-Out: Why You Need a Transition Manager and a Specialized Legal Team
In a carve-out scenario, the leadership’s top priority is clear: secure the transaction while maintaining operational performance. However, carve-outs demand significant internal resources—often at the expense of day-to-day business. That’s where the transition manager steps in, acting as the true conductor of the operation.
A Single Point of Contact Driving Operational Success
The transition manager provides overarching coordination of the carve-out, leading all stakeholders and ensuring consistency across all actions.
By relieving internal teams and centralizing key decisions, they keep the project on track while minimizing disruption from internal dynamics. Their neutral stance and dedicated focus on the success of the operation make them a strategic ally for top management.
A Winning Duo: Transition Manager and International Legal Counsel
To optimize the process, the transition manager must rely on a law firm with deep carve-out expertise and an international network. This partnership enables:
- Early anticipation and structuring of legal aspects,
- Effective preparation of the Data Room,
- And a coherent, end-to-end negotiation of the SPA and TSA.
Internal Teams Involved—but Rarely Sized for This Type of Operation
While internal teams—particularly legal departments—naturally have a role to play, they often lack the capacity to lead such complex, cross-functional, and coordination-heavy projects. This is especially true in SMEs and mid-sized companies, where support functions are designed for day-to-day operations, not for exceptional transactions. In this context, bringing in external experts becomes a pragmatic solution to ensure executional rigor, meet deadlines, and secure the entire transaction process.
Securing the Transaction Through a Structured, Forward-Looking Approach
Engaging an experienced law firm early in the process, alongside the transition manager, enables the carve-out to be structured in a rigorous and coherent way. This upstream coordination streamlines the preparation of key legal documents, enhances communication efficiency, and creates the conditions for a controlled negotiation. It also ensures that the company’s interests are strongly aligned and robustly defended at every stage of the process.
