Question 1

What is a carveout?

Accepted Answer

A carveout is the separation of part of a business from its parent company so it can operate independently or be sold. It often requires separating systems, teams, operations, and shared services so the new business can successfully operate as a standalone organization.

Question 2

What is the difference between a carveout and a divestiture?

Accepted Answer

A divestiture is the broader process of selling, separating, or disposing of a business unit, asset, or subsidiary. A carveout is a specific type of divestiture that typically involves creating a standalone business with its own operating model, systems, processes, and support functions.

Question 3

How do divestitures work?

Accepted Answer

Divestitures begin by defining the scope of the separation, assessing operational and technology dependencies, and identifying the costs and risks of creating a standalone business. Organizations then plan for transition service agreements (TSAs), Day 1 readiness, governance, and the future operating model to help ensure a smooth separation and long-term success.

Question 4

What should a divestiture strategy include?

Accepted Answer

A successful divestiture strategy includes scope definition, separation readiness, operating and cost modeling, TSA planning, governance, risk management, and a roadmap for Day 1 and beyond. It should also address separation costs, standalone operating costs, and the capabilities the new organization needs to succeed after the transaction closes.

Question 5

What makes a company a strong candidate for divestiture?

Accepted Answer

A company may be a strong candidate for divestiture when part of the business no longer aligns with strategic priorities or could create greater value as a standalone organization. Divestitures can also help simplify operations, reduce complexity, sharpen strategic focus, and unlock long-term growth opportunities.

Question 6

What is the main difference between a carveout and a spin-off?

Accepted Answer

The primary difference between a carveout and a spin-off is what happens to ownership after the separation. In a carveout, the business is typically prepared for sale or operated as a standalone entity. In a spin-off, ownership is generally distributed to the parent company's shareholders, creating a new independent company.

Question 7

How does West Monroe help organizations execute carveouts and divestitures?

Accepted Answer

West Monroe helps organizations plan and execute carveouts and divestitures from strategy through Day 1 readiness and beyond. Our services include sell-side diligence, TSA management, target operating model design, NewCo planning, separation management, and technology stand-up to reduce risk, accelerate execution, and maximize transaction value.

Question 8

Why choose West Monroe for carveout and divestiture advisory?

Accepted Answer

West Monroe combines deep transaction expertise with hands-on execution to help organizations complete carveouts and divestitures with speed and confidence. We help clients reduce risk, accelerate TSA exits, lower stranded costs, and build standalone organizations positioned for long-term success.

Carveouts & Divestitures

How We Help with Carveouts & Divestitures

Carveout Diligence and Sell-Side Readiness

TSA Management and Execution

Target Operating Model and NewCo Definition

Separation Management Office (SMO) Program

Technology Stand-Up and Interim Leadership

The Case for Carveouts & Divestitures

What We'll Achieve with Carveout & Divestiture Advisory

Clean Divestitures

Optimized TSAs

Scalable Target Operating Model

Streamlined Execution

Why Choose West Monroe For Carveout & Divestiture Advisory

Award-Winning Carveout Experts

Shared Impact and ROI

Flexible and Fast

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