What is a carve-out? From a pure process point of view, it involves separating a business unit, subsidiary, or line of business from its parent company. Carve-outs usually are launched ahead of, or in parallel with, a divestiture. The new entity can be offered to investors via an IPO, sold to an industry player or private equity firm, or spun off to existing investors to boost shareholder value.
In the right circumstances, it’s hard to top a carve-out for compelling strategic benefits. Carve-outs enable companies to capitalize on parts of their businesses that no longer fit strategic goals—while streamlining operations, paring costs, and enabling more-nimble responses to market shifts.
How BCG Enables Corporate Carve-Outs
BCG brings a distinctly holistic, end-to-end approach to these high-stakes transactions. Our strategic insight and deep industry expertise enable us to advise clients throughout the carve-out continuum.
We set you up for success with our clear focus on value, our deep expertise in strategy and business, our experience with complex carve-outs, and our structured approach, which pushes well beyond a purely mechanical separation exercise. We work shoulder-to-shoulder with you to boost the new entity’s value to shareholders and prospective buyers and ensure business continuity from day one.
Critically, we also reduce distractions, freeing you to focus on vital day-to-day operations. After all, even the most profitable carve-out is only as successful as the business you hold when the signatures are dry.
Containing Carve-Out Complexity
A carve-out transaction requires managing business, accounting, and legal issues simultaneously, often across functions, nations, and cultures. The result can be a torrent of micro-milestones and metrics that must be addressed and coordinated during a process that typically stretches 6 to 12 months.
To contain that complexity, BCG’s carve-out consultants help clients consider three factors: approach, timing, and setup.