Soapbox: Untangling the wires

Alvarez & Marsal Business Consulting's Anthony Treccapelli and Ronald Bisaccia weigh in on the difficulties of managing technology in a carve-out in a Feb. 25 Deal newsweekly column. 

Continue reading below

They note:

Unlike mergers, carve-outs involve the acquisition of a business unit from a parent company to create an independent business. The new company, which formerly relied on shared corporate support services, is forced to build new technology capabilities, making the transaction riskier than traditional integrations, which focus on identifying synergies and cutting costs.

...The first step is to assess the gap between the technology assets being acquired and the standalone business' day-one operational needs. Not only will this minimize risk, it can be important in negotiating the deal price. For example, replacing or upgrading technology assets will impact capital costs and should be properly budgeted for.

Read on for the other critical factors

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