Carve-out:
selling a subsidiary or business division
on the right terms

Deciding to sell a division is rarely an admission of weakness. A legacy activity that is no longer strategic absorbs capital and attention that the core business needs. A profitable subsidiary with no synergies with the rest of the group would be worth more in the hands of a player in its own sector. A refocus becomes necessary after years of diversification, or the proceeds of a disposal are needed to fund a more strategic acquisition. The real difficulty lies elsewhere: selling a division is not the same as selling a company. The activity is embedded in the group — shared support functions, contracts signed at group level, cross-functional teams, common systems — and as it stands, it is simply not something a buyer can acquire.

A carve-out means making the division self-standing — at least on paper, and often in practice. It starts with the perimeter: which assets, which contracts and which employees go with the business, and the transfers this entails. Next come the stand-alone accounts: a profit and loss account for the division on its own, with support-function costs recalculated at their real level — because a buyer will not pay on the basis of profitability subsidised by the group, and will uncover any flattering assumptions during due diligence. Finally, transitional services agreements (TSAs) govern the period during which the group continues to provide the divested division with IT, payroll or logistics until the buyer takes over: well structured, they reassure buyers and unlock bids. That leaves the choice of format — a prior hive-down into a subsidiary followed by a share sale, or an asset sale of the business as a going concern — which is decided with your legal and tax advisers according to the issues specific to the deal.

Our work starts well before the first contact with a buyer: building credible stand-alone accounts, preparing the perimeter and the TSAs, and writing an equity story specific to the division — its market, its strengths, its potential in the hands of the right owner. We then identify the buyers for whom this activity is strategic: they are often outside your immediate sector, sometimes abroad, and that is precisely where our broader sourcing makes the difference — and pushes up the price. The process is run under heightened confidentiality, because a carve-out that leaks unsettles the division's employees and customers before it has even begun. Through to completion, we coordinate due diligence, the negotiation of the TSAs and the warranty and indemnity package (garantie d'actif et de passif) specific to this type of deal — so that the sale genuinely frees your group, with no loose ends left behind.