The most common reasons for carve-outs (business sale / asset deals) are the lack of strategic relevance of the business unit, followed by insufficient profitability. Such sales are substantially more complex in terms of preparation, execution and disintegration compared to the sale of a legal entity. Over three quarters of transactions are closed at a price below the buyer’s initial offer. The main reason for this is the fact, that the companies were not prepared for the challenges of the transaction.

In our whitepaper we list not only the stumbling blocks but also the measures which are necessary for a successful carve-out transaction.

For important decisions such as granting or maintaining financing, refinancing or major investments, the decision-making bodies (e.g., Board of Directors, management, owners, financial institutions or investors) need transparent documents based on sound and plausible assumptions about the future development of the company and its finances.

In such situations the parties call for an independent expert analysis like the Independent Business Review ("IBR"). This does not imply a distrust of the creator of decision documents, but an understanding that the opinion of an independent third party is more transparent and helpful for sound decision making.

Is our business “transaction ready”? The vast majority of business owners and managers would answer “yes”. In reality, transaction readiness is common among publicly traded companies, but very rare with private firms or business units. If a business is performing well, this does not necessarily mean that it is automatically “transaction ready”. Transaction Readiness is not just about business performance and owner readiness. It particularly is about the attractiveness of the business to potential buyers and the smooth and speedy realization of the transaction.

A business is “transaction ready” if it could be sold (a) within six months, (b) at or above market valuation, and (c) without interfering with current course of business.

The success of a divestment, carve-out of a business unit, merger, IPO, or capital increase strongly depends on early and thorough preparation.

This essay focuses on the purpose, scope, and benefits of a Transaction Readiness Assessment.

Fueled by historically low interest rates, acquisitions have played an increasingly prominent role in corporate growth strategies in recent years, a trend that is likely to continue in the future. Done well, it has proven to be a very effective strategy. Nonetheless, executing a value-creating M&A strategy is far from easy. As numerous market studies have pointed out, for many companies, M&A activities have often resulted in eroding, rather than creating value. However, certain companies have established a successful M&A track record. In this thought-leadership paper we will highlight what makes these companies such successful acquirers.