Technology Carve-Out Assessment

At a glance

I worked on an assessment of two business units within a larger company. The team examined their technology dependencies and estimated what separating them from the parent and operating them independently could require.

I researched the firm, mapped how the parent supported the businesses, and built a bottom-up technology cost model covering one-time separation costs and recurring costs of operating independently.

The separation question

A business unit can depend on its parent for people, systems, vendors, and shared technology environments. Understanding those dependencies is an important part of assessing what a buyer would need to take on.

Our assessment considered potential strategic and financial buyers. A buyer's existing capabilities and operating plans could affect which services needed to be retained, replaced, or migrated.

My role

I carried out the initial research on the firm and worked to understand which parts of the parent supported each business unit. I then built a bottom-up model to estimate the technology costs of separation and independent operation.

The work involved connecting individual dependencies to the costs and assumptions that potential buyers would need to understand.

What we assessed

The team examined:

• The staff and services supporting each business unit.
• The systems in use and potential migration requirements.
• Shared technology environments and tenants.
• Services the parent would need to continue providing through transition services agreements, or TSAs.
• How long those temporary services might be needed before the businesses could use their own arrangements.

A TSA allows the parent to continue providing specified services for a period after separation. Here, it was part of understanding the transition dependencies and timing, rather than assuming the businesses could become independent immediately.

The modeling challenge

The difficult part was estimating the cost of a business operating on its own when many of its capabilities were still shared with the parent.

The model needed to account for those dependencies and make the assumptions behind the cost range clear. Buyer scenarios also mattered: a strategic buyer with existing systems might face different requirements from a financial buyer planning an independent operating environment.

Why it mattered

Potential buyers needed a practical view of the technology costs and dependencies they could inherit. The estimated range gave them information to consider when evaluating the business and planning its separation.

The model focused on technology separation and operating costs. It was not a purchase-price estimate.