It was fantastic to be a part of a recent roundtable discussion organised by BZ, during which we focused on “The Art of the Corporate Carve-Out”.

Carve-outs have seen a resurgence in the post-pandemic years, as corporates look to divest non-core business units and generate value from de-prioritised assets through this separation process.

At a time when carve-outs have pushed their way to the forefront of M&A activity, my fellow industry experts and I covered a broad set of themes, ranging from viability to complexity to negotiation dynamics to what can be learned from M&A processes.

A few of my reflections from the roundtable are below, and you can read the full report here

  1. Carve-outs present an opportunity for outsized returns because the value of the existing business may be considerably higher in independent hands when provided with dedicated attention to support the growth of a business.
  2. Although understanding the financial picture can be challenging for the buy-side, this complexity also presents an opportunity for sophisticated buyers to obtain a value arbitrage. Therefore, buyers need to conduct a thorough assessment to ascertain an accurate view of value creation opportunities.
  3. For financial buyers, identifying talented leaders is a key driver of value for any newly carved-out business. Unearthing motivated and strategic leaders within an organisation that can step up in a standalone business is imperative for future success.