Having conducted an initial assessment (refined during due diligence) of what is required to separate a target business from a Group, the following areas are typical:
- Assessment of use of capacity and resources post carve out
- Identification of assets to be transferred, leased or licenced (physical assets, IP, brands and other intangible assets)
- Staff redeployment or staff transfer, including new employment contacts and superannuation arrangements
- Taxation steps, including the establishment of new cost bases, and transfer of records
- Extraction of financial, customer and other business data and records and their migration
- Development of ongoing service agreements between the buyer and seller, such as
- Premises leases (shared or stand-alone)
- Ongoing customer/supplier relationships
- Development of transition service arrangements for short term services or assets provided by one party to the other, including premises, taxation, treasury, accounting and financial support, IT systems and support
- Transition of external service arrangements, such as insurance, audit and external IT support
- Communication to key employees, customers, suppliers and other relevant stakeholders
- Identification of key carve out risks and ways to manage them
- Monitoring of the costs of the carve out
- Preparation of pro-forma financial statements, and the use of completion accounts to ensure a clean starting point for the carve out
The complexity of a carve out will depend on the level of autonomy of the business being sold, and the level of any shared services or customer/supply agreements in place.