At Covelent, we specialise in providing comprehensive Divestitures and Carve-Outs consulting services designed to maximise value creation and minimise risks for our clients. Our expertise spans a wide range of industries, enabling us to tailor our approach to suit the unique needs of each client. Whether you are considering a strategic Divestiture to refocus your business on core activities, a Carve-out to unlock the hidden value of a high-growth subsidiary, or planning an IPO to access capital markets.
Our Approach
At Covelent, our approach to Divestitures, Carve-outs, IPOs, and Spin-offs is designed to unlock maximum value for our clients while ensuring a smooth and efficient transaction process. We leverage our deep industry expertise and strategic insight to provide end-to-end support throughout the entire lifecycle of a Divestiture or Carve-out, enabling our clients to focus on their core business.
Our Divestiture consultants work closely with clients to assess opportunities and prepare for optimal exits. Going beyond the surface to evaluate potential buyers and the assets in question, ensuring we maximise the value of each transaction. Our approach is comprehensive yet highly tailored, going beyond standard checklists in favour of bespoke strategies that align with each client's unique goals.
1. Creating the Case for Divestitures
In the initial phase, we focus on establishing a compelling case for the Divestiture or Carve-out. This involves a thorough review of the client’s portfolio to identify assets that could generate greater value if sold or spun off. We also develop an exit strategy that enhances the appeal of the divested asset, which may include operational improvements, financial restructuring, or repositioning in the market.
2. Unlocking Value in the Exit Process
The second phase centres around executing the Divestment or Carve-out to maximise value. This begins with a well-planned separation process to ensure the carved-out entity operates independently without value leakage. We provide oversight to navigate complexities and mitigate risks, particularly around transitional services and stranded costs.
Additionally, we craft a compelling equity story and business plan for the carved-out entity or IPO, positioning it as a valuable investment opportunity to prospective buyers or investors. This is supported by high-value operational enhancements that align with the new entity's strategic vision, ensuring a successful outcome for both the parent company and the divested business.
Maximising Value Creation
Strategic Divestitures
Divestitures are a powerful tool for organisations looking to optimise their portfolio, refocus on core business areas, or raise capital. At Covelent, we understand that successful Divestitures require more than just a sale, demanding a well-thought-out M&A Strategy that aligns with the company's long-term goals. Our approach to Divestitures focuses on careful planning, strategic execution, and robust post-transaction integration to ensure our clients achieve maximum value creation.
Our Divestitures consulting services encompass:
- Strategic Assessment: We help our clients evaluate their portfolio to identify non-core assets that can be divested to unlock shareholder value. This involves a comprehensive analysis of market conditions, competitive dynamics, and potential buyers.
- Preparation and Planning: We guide our clients through the meticulous preparation required for a successful Divestiture. This includes developing a clear business case, conducting Due Diligence and Vendor Due Diligence, and ensuring that all regulatory and compliance requirements are met.
- Execution Excellence: Our experienced team supports the execution phase, managing everything from bidder outreach and negotiations to deal structuring and closing.
- Post-Divestiture Integration: To ensure the ongoing success of the parent company, we provide support for post-Divestiture integration, helping to manage any stranded costs, transitional service agreements (TSAs), and dis-synergies that may arise.
Expert Carve-Outs: Creating Independent Value
Carve-outs present a unique opportunity for companies to create independent value for both the parent and the carved-out entity. Carve-outs are particularly effective when a high-growth business unit requires more capital and focus than the parent company can provide. At Covelent, we help clients navigate the complexities of Carve-outs, ensuring that both the parent company and the new entity emerge stronger and more focused.
Our Carve-Outs consulting services include:
- Carve-Out Strategy and Planning: We work closely with our clients to define the strategic rationale for the Carve-out, identify the assets to be separated, and develop a comprehensive plan for the transition. This includes defining the target operating model and determining the scope of transitional services.
- Separation Management: Carve-outs often involve complex operational and financial separations. We provide end-to-end management of the separation process, addressing critical path issues, mitigating stranded costs, and ensuring business continuity.
- Capital Markets Preparation: If the Carve-out is being prepared for an IPO, we assist in all aspects of IPO readiness, from financial structuring to investor relations and regulatory compliance.
IPOs and Spin-offs: Unlocking Capital and Focus
IPOs and Spin-offs are strategic divestitures that enable companies to unlock value by creating focused, independent entities. IPOs offers the advantage of raising new capital, while a spin-offs allows for greater strategic flexibility and focus on core business areas. Covelent’s deep expertise in managing IPOs and Spin-offs ensures that our clients can make informed decisions and execute with confidence.
Our services in this area include:
- IPO Readiness and Execution: We help companies prepare for an IPO by assessing market conditions, refining the investment thesis, and developing a robust equity story. Our team provides comprehensive support throughout the IPO process, including selecting underwriters, managing the roadshow, and ensuring compliance with listing requirements.
- Spin-off Strategy and Implementation: Spin-offs require a different approach compared to other Divestitures. We guide our clients through the strategic considerations of a Spin-off, such as defining the standalone operating model, managing the separation costs, and setting up the new entity for long-term success.
Holistic M&A Strategy and Support
At Covelent, we believe that a holistic M&A Strategy is critical to the success of any Divestiture, Carve-out, IPO, or Spin-off. Our multidisciplinary team combines deep industry knowledge with functional expertise in areas such as finance, operations, and strategy to provide a seamless, end-to-end service offering.
By focusing on value creation, strategic alignment, and operational excellence, we help our clients effectively navigate Divestitures, Carve-outs, IPOs, and Spin-offs, positioning them for sustained growth and success in an increasingly competitive market.
