Standalone IT from day one – even after a carve-out
Carve-outs as value drivers in the private equity environment
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An IT carve-out is the premier discipline of corporate integration
Carve-outs are among the most complex undertakings in the M&A environment. At the same time, they offer considerable potential to systematically increase corporate value – provided they are planned early and professionally. Especially for private equity investors, a cleanly prepared carve-out is a crucial building block for a successful exit strategy.
However, in the mid-market sector, established organisational structures often present a particular challenge. IT landscapes that have evolved over years, joint processes and shared services cannot be separated from one another at short notice. Without structured preparation, avoidable risks, delays and additional costs will arise.
Conversely, those who take a strategic approach to the carve-out lay the groundwork for a smooth transition, strengthen their position during due diligence and increase the company's appeal to potential investors. A well-thought-out separation thus transforms from a mandatory operational project into a genuine value driver.
Why an IT carve-out is different from an integration
A merger brings together two existing IT landscapes. A carve-out is the opposite challenge: the spun-off part of the company often no dedicated IT organisation, no in-house contracts and no dedicated infrastructure – everything has to be recreated while ongoing business operations must not be interrupted.
Typical starting position:
- No independent IT or SAP organisation in place
- Shared systems and contracts must be unbundled
- Where applicable, the vendor may provide IT services for a limited period only via a TSA (Transitional Services Agreement).
- Close procedural integration with the previous parent or sister company must be unwound
If this phase is not managed properly, there is a risk of operational disruptions if the TSA expires before the company's own IT structure is in place.
Our approach to IT carve-outs
A successful IT carve-out begins long before the closing – and only ends once a stable, independent IT function is in place.
The 4-phase processes
1. Analysis & Unbundling
We record the existing IT landscape of the business unit to be spun off, identify shared systems, licences and contracts, and determine what needs to be unbundled – including an assessment of which TSA services are actually required and for what period.
2. Target architecture & structure
We are defining the target architecture for the new, independent IT organisation – from directory services and email through to a ERP system right through to the network infrastructure – and set them up in parallel with the ongoing TSA, so that there is no gap between the phasing out of the transitional services and the start of our own operations.
3. TSA Management
We coordinate the transition phase with the previous parent company or sister company, monitor the deadlines and scope of the TSA, and ensure that our own infrastructure is up and running in good time before the TSA expires.
4. Stabilisation & Handover
Following the migration to the standalone IT environment, we support stable operations and hand over responsibility for ongoing support – either as a standalone in-house IT organisation or as part of our Managed Services.
The core action areas of an IT carve-out
While the four phases above describe the chronological sequence, this section focuses on the specific technical areas to be addressed within these phases:
- De-coupling mission-critical systems: ERP, CRM, HR and email systems are set up independently instead of continuing shared environments.
- Securely transferring data: Relevant master, transactional and archived data are completely, consistently and audit-securely transferred to the new IT landscape.
- New IT Infrastructure to create Networks, servers, cloud services, firewalls as well as access and identity management are being set up for the new organisation.
- Reorganise licences and contracts: Software licences, maintenance contracts and service level agreements are reviewed, reallocated or renegotiated.
- Ensure information security: Data protection, compliance requirements and Cybersecurity must be consistently ensured throughout the entire separation process to avoid risks and business interruptions.
Frequently Asked Questions about the IT Carve-out
An IT carve-out is the process whereby a spun-off or separated part of a company establishes its own independent IT infrastructure, as the existing IT infrastructure remains with the seller or the parent company.
During a post-merger integration, two existing IT landscapes are merged. In a carve-out, a completely new, independent IT landscape is created because the spun-off part did not previously have its own infrastructure.
A TSA is a temporary contract through which the seller continues to provide IT services to the carved-out business division for a transitional period until its own infrastructure is up and running. TSA management – deadlines, scope of services, handover timing – is one of the most critical factors for a smooth carve-out.
This depends on the size and complexity of the IT landscape; in practice, TSA transition phases often range from a few months to a year, and in some cases even longer. It is crucial to link the timetable realistically to the actual time taken to set up the new infrastructure, rather than to a fixed TSA deadline.
If the transitional agreement expires before the standalone infrastructure is operational, there is a risk of business disruption – ranging from restricted system access to the halt of mission-critical processes. Early, realistic scheduling is therefore essential.
The earlier, the better – ideally already during the due diligence phase, so that the IT requirements and the scope of the TSA are realistically factored into the transaction planning from the outset, rather than only becoming apparent after signing.
Your benefits with us as a partner
- Technological expertise: We know modern IT architectures down to the last detail and develop solutions that work sustainably.
- Experienced project management: With clear structures, proven methods and a transparent approach, we safely guide complex transformation projects to success.
- Flexibility with foresight: We integrate new requirements pragmatically, without losing focus on time, quality and your project goals.
- Collaborative partnership: We create transparency, involve all relevant stakeholders and ensure smooth communication across all levels.
- Tailor-made solutions: Instead of standard concepts, we develop IT solutions that fit your organisation, your industry and your strategic goals.
Together, we will lead your IT carve-out safely, in a structured manner and efficiently to success – with clear processes and reliable results.
The closing is the starting point – not the finish line.
Arrange an initial consultation on the IT carve-out
An IT carve-out presents companies with particular challenges – from unravelling complex, organically grown IT landscapes to ensuring business operations run smoothly.
In a no-obligation 30-minute initial consultation, we will jointly analyse your current situation and show you where we can create the greatest added value for your project.
Together we will find out whether and how we can effectively support you in planning and implementing your IT carve-out.
I look forward to exchanging with you.
30-minute IT carve-out consultation – with no obligation and free of charge.
