Why carve-outs stall
A company sale starts with an entity that already has its own accounts, contracts and staff. A carve-out starts with none of those and has to manufacture them while the business keeps running.
That manufacturing work is where these processes succeed or fail, and it is almost always discoverable in advance. Four questions decide the outcome. A seller who has written answers to all four before launch is running a different process from one who has not.
One: what exactly is being sold
Write the perimeter down. Which products, which customer contracts, which engineers, which intellectual property, which domains, which data, which third-party licences, and which shared services the division consumes.
Where you cannot decide, decide anyway and record it as an assumption. An explicit assumption a buyer can price is worth far more than an open question a buyer has to discount. Grey areas found during diligence are the most common cause of a price re-trade in this kind of transaction.
A useful test. If the buyer took possession on Monday and your group cut every shared connection at midnight on Sunday, what breaks? Everything on that list is either inside the perimeter, inside a transition services agreement, or a problem you have not solved yet.
Two: what it costs to run alone
Build the standalone cost base bottom-up, function by function, and document the basis of each line.
Finance needs a controller, an accounts function and an audit. People needs HR, payroll and an employment law relationship, and benefits pricing is a trap because a 200-person company does not buy healthcare at the rate a 12,000-person group does. Technology needs cloud spend at standalone commit levels rather than the group's negotiated enterprise rate, plus identity, monitoring and whatever certification the group was maintaining invisibly.
Understate any of this and diligence corrects it downward against your EBITDA at the worst possible moment. Model it honestly and disclose the basis, and you convert a re-trading risk into evidence that you understand your own business.
The other half of the same question belongs to your board rather than to the buyer. Group cost that was serving the division does not vanish when the division does. Some is truly variable; a meaningful share is stranded and stays with the parent. Quantify it before launch, because a transaction that looks accretive on the headline price alone can look different once stranded cost is counted.
Three: whether the contracts can move
Customer contracts are the asset. If they cannot transfer, there is nothing to sell.
Check three things. Whether the contracts sit with the division or with a group entity. Whether they are assignable, and whether assignment needs consent. Whether any of them are master agreements covering products that are staying behind, because those have to be separated line by line and each separation is a conversation with a customer you would rather not have during a process.
Third-party licences deserve the same treatment. Enterprise agreements negotiated at group scale rarely transfer, and the divested business will be re-pricing them as a much smaller customer. That belongs in the standalone cost base, not in a footnote.
Four: whether the people stay
Allocating a shared employee to one side of a separation is a decision about someone's job, and they will find out. Sequenced too early it leaks; too late and the buyer is presented with an unresolved question about who they are actually acquiring.
The pattern that works is to identify the critical individuals early and confidentially, agree retention arrangements before the process reaches a stage where disclosure is unavoidable, and be able to tell a buyer clearly which named people transfer and what has been done to keep them.
Buyers price this directly. A carve-out where the team is defined and retained is a materially different asset from one where the answer is that it will be worked out later.
What the four have in common
None of them are difficult. All of them take time, and none can be compressed once a process is live, because a live process consumes exactly the management attention the work requires.
Eight to twelve weeks of preparation is the usual figure for a division that has never been separated. That is the single highest-return activity available to a corporate seller, and the time either goes in before launch or comes out of the price during diligence.
Divestitures.com Research · Published for orientation, not as advice on a specific transaction. Any figure cited is orientation, not a valuation. See market notes.