What is a corporate carve-out?
A corporate carve-out enables a business to split away from its parent company, in other words to sell or spin off a non-core asset, freeing up its management team and allowing them to move in a new direction, reach full potential and remove any potential barriers whilst ensuring all involved parties walk away happy.
Often, a private equity firm will work directly with the existing management team to buy the business, gain autonomy and help take it forward, pursuing their own growth ambitions.
How to choose the right private equity firm?
The right private equity firm can support a carve-out in numerous ways. Not only can they provide you with the funding necessary to carry out the transaction, but they also offer hands-on expertise to help navigate the complexity of a carve-out and enable the newly carved out business become a standalone entity.
To manage this, the process requires a detailed separation plan that maps out everything from operational dependencies to people considerations. There will be a long list of separation activities, such as novating customer and supplier contracts, putting in place standalone IT and payroll solutions and developing the new organisation structure, which need to be addressed in order to ensure the business can continue to operate seamlessly post carve-out.
LDC: a proven partner for carve-out success
Our experienced team of Value Creation Partners can provide hands-on support, working in partnership with management teams to develop the business’s strategy, enable a smooth transition and ensure it is set up for success from day one.
LDC has a strong track record of delivering successful carve-outs and helping previously unloved businesses to thrive, by providing strategic input and ongoing investment to support growth. And our unique funding model – supported by Lloyds Banking Group – means our access to capital to support our portfolio companies’ growth ambitions is evergreen.
Unlocking potential in corporate carve-outs
Lizzie Meadowcroft, VCP Director at LDC explores the complexities of corporate carve-outs and how private equity can help management teams to navigate them. She also discusses the impact of LDC’s six-year partnership with the team at HSL Compliance, following the carve-out from its parent group Kiwa.
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Richard Linstead, BCIS
LDC backed an ambitious vision under independent ownership, investing in people and infrastructure, enabling us to build out our sales and product capabilities.”
Liam Roberts, The Edwin Group
With the team at LDC’s support, we are now better equipped than ever to meet schools’ and multi-academy trusts increasingly complex needs.”
Gavin Hartley, HSL Compliance
With the support of LDC, we have established HSL as a market-leading TICC service provider in the UK.”