Cortus Advisory Group Transaction Services Partner Jenny Kirkham nee Quinn discusses further below:

“Having been on both sides of the table, I’ve seen first-hand why producing reliable carve-out financial information is often far more complex than many expect.

Earlier in my career, as Group Financial Controller of an international chemicals group, I led the preparation of carve-out financial statements for a business being separated from the wider group. The carve-out was subsequently audited by PwC, giving me a deep appreciation of the level of scrutiny applied to the assumptions, allocations and methodologies used.

Whilst the financial challenges are significant – including historical cost allocations, shared service arrangements, intercompany balances, standalone adjustments and normalisation of results – the operational challenges can be equally demanding. Understanding how the business actually functions outside the group, identifying dependencies and assessing what the standalone operating model will look like are all critical to producing meaningful information.

Since then, I’ve had the opportunity to diligence many carve-out transactions from a buyer perspective. One of the most common themes is that quality carve-out preparation can significantly reduce uncertainty, accelerate a transaction process and improve stakeholder confidence.

Whether acting for vendors preparing for sale or investors assessing a carve-out opportunity, bringing together financial, operational and transaction experience is key to navigating the complexities successfully.”

Carve-outs are certainly an area of the market that look set to remain busy over the coming months, so if you are considering one and would value insight from an adviser who has experienced the process from both sides of the table, contact Jenny Kirkham nee Quinn.