Roadmap For Successful Carve-Out Projects |
Posted: May 29, 2023 |
Mergers and acquisitions (M&A) are seen as a key factor to growth in business. It seeks to acquire companies that offer the same products, goods, or services. One more process is used. The M&A is done by purchasing a divestiture of a unit or division from the selling company is acquired. This process is called carve out. It is a partial divestiture of a business unit, subsidiary, or division. It is a complex strategy where the parent company retains equity and shares in the profits of the divested unit. Reasons for a carve out There are several reasons why a carve out process looks beneficial. Some key reasons are:
Types of carve out While considering a carve out strategy, there are two types. 1. Equity Carve Out In an Equity Carve Out, there is a sale of equity. Ownership shares in the subsidiary or division being divested are sold. This allows the business to have cash flow right at the beginning. This type of carve out is used by:
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