A carve-out’s operating model must align with the seller’s strategy

For carve-outs, designing the right operating model and implementing it well can make the difference between success and failure

Carving out a business for divestment can be a great source of value for companies looking to focus on their core or eliminate underperforming units. Ideally, the seller should present the divested operation to potential buyers as a “business in a box”—a standalone entity ready to thrive unencumbered by operational, managerial or financial issues.

But the value to be gained from divestment could be lost if the seller doesn’t properly plan or execute the carve-out. Making the right decisions to generate a successful outcome, in turn, requires a clear methodology for building an operating model that best aligns with the seller’s strategy.

If the deal is properly executed, buyers and sellers can reap significant rewards. If not, the potential value for both parties is at risk. KPMG recommends key action steps for success and identifies common pitfalls to avoid.

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Thomas Johnson

Thomas Johnson

Managing Director, Advisory, HCLS Strategy, KPMG US

+1 312-665-2110
Simon Hodson

Simon Hodson

Director, Advisory | Strategy - TE, KPMG US

+1 202-294-0625