Harnessing the potential of a mid-sized corporate carve-out can deliver tremendous value, but these transactions can be fraught with a multitude of known and unknown challenges not normally seen in a traditional buyout. Identifying these complexities and how adept one is at managing them at the beginning can foreshadow the transaction’s ultimate success. In our work transitioning more than 50 middle market corporate carve-outs into independent businesses, we’ve learned some important lessons along the way that can make a meaningful difference.
First, it’s important to remember that not all corporate carve-outs are created equal. Size can have a significant impact on the look and feel of the transaction. For example, a carve-out from a Fortune 50 company may look and feel similar to the acquisition of a standalone business. But for a middle market business carve-out, the complexities can quickly become wide-ranging.