Carve-out & Separation Advisory

When corporations spin off business units or PE investors extract portfolio assets from group structures, the quality of the separation determines the realised transaction value. Particularly for units with a high commerce share, disentangling the underlying systems, data flows and platform architectures is the central success factor and at the same time the area with the greatest operational risks.

Context and relevance

The majority of companies name operational disentanglement as the greatest hurdle in carve-outs – ahead even of valuation complexity and regulatory requirements. For commerce-intensive business models, this complexity is amplified further, as interwoven marketplace connections, shared ERP systems, cross-channel customer data and integrated fulfilment structures form a tight web of dependencies that cannot be resolved with generic separation plans.

Conventional transaction advisers identify the areas requiring separation but often lack the operational depth to cleanly separate digital value chains down to the system level. In practice, this leads to delayed deal closings, extensive and costly transitional agreements, and a noticeable impairment of value realisation in the subsequent standalone operating phase.

Our approach

FOSTEC & Company supports IT and digital carve-outs along a structured four-phase model that fully covers the technical disentanglement from the initial interdependency analysis through to the go-live of the standalone entity (Figure 1: FOSTEC & Company separation phase model for carve-outs):

Phase 1: Scoping & interdependencies

• Systematic mapping of all digital interconnections – commerce platforms, marketplace connections, data flows, APIs and IT services
• Identification of contractual, organisational and technological dependencies on the parent company as the basis for a complete and robust separation logic

Phase 2: Separation design

• Development of a clearly structured separation plan with defined work packages, responsibilities and milestones
• Definition of an operationally implementable target model for the standalone entity, including governance, process and system structure

Phase 3: TSA and architecture

• Design of a structured transitional model (transitional service agreement framework) with precise definition of temporary services, terms and exit roadmap
• Design of the future system and commerce architecture that enables stable operational management from day one as well as scalability

Phase 4: Migration and go-live

• Management of the technical and operational disentanglement, including data migration, system changeover and go-live of the standalone entity
• Ensuring a stable start of operations through structured implementation planning, clear handover points and validation of functionality

Figure 1: FOSTEC & Company separation phase model for carve-outs

Results and impact

At the end of the carve-out process, clients receive a separated entity that functions in an operationally stable way. The analysis provides negotiating certainty through a clearly structured TSA framework, planning certainty through a robust migration roadmap, and a target architecture that enables growth from day one. FOSTEC & Company’s specialisation in digital and commerce carve-outs ensures that the technical disentanglement does not become an operational bottleneck, but is instead shaped as a targeted value lever.

While carve-out and separation advisory is geared towards a controlled separation, post-merger integration represents the complementary challenge of bringing two organisations together in such a way that the value calculated in the deal is reliably realised.

Position within the service portfolio

The portfolio of due diligence services comprises offerings of varying scope and focus. FOSTEC & Company provides 360-degree due diligence services for the analysis of all business aspects:

• Commercial Due Diligence
• Digital & E-Business Model Due Diligence
• Technology, Data & AI Due Diligence
• Organization & Talent Due Diligence
• Merger & Acquisition (M&A) Advisory
• Value Creation & Exit Readiness
• Carve-out & Post-Merger Integration

Find out in a personal introductory conversation how FOSTEC & Company provides structured support for a carve-out from the interdependency analysis through to the go-live of the standalone entity – get in touch with us.