Winning carve-outs
How carve-out due diligence transforms investing
Carve-outs present private equity (PE) investors with significant upside for superior returns; they also pose specific risks and challenges. But with the right mindset and expertise, carve-outs can help make your bold merger, acquisition, and restructuring aspirations a reality.
Carve-out opportunities
Carve-outs are an integral feature of the merger and acquisition (M&A) and restructuring landscape. The impetus for businesses of varying scale to evaluate their portfolio and divest non-core assets presents significant opportunity for both strategic and financial buyers. Carve-out deals typically present the potential for superior returns. Specifically, PE investors have access to assets that have not received adequate attention or capital infusion as part of a more diversified organization; this presents attractive opportunities for transformative top-line growth and margin improvements.
Inherent to carve-out transactions, however, is a greater degree of complexity and uncertainty. Buyers need a defined strategy and well-developed approach to capitalize on and maximize the opportunities carve-outs present. This means that carve-out due diligence should become a key part of the process.
A clearer path to carve-out success
Moving forward
Carve-outs can have their own complexities. Fortunately, those challenges aren’t a mystery, and neither are the avenues for huge opportunities. By pacing themselves and thinking creatively, PE buyers can carve out room for their bold aspirations.
