lucentis consulting carve out framework v1.0
TRANSCRIPT
Selling of Company Parts
Introduction toFramework Carve Out
Carve out
Content
Lucentis Consulting Our approach Hard stuff – general approach
Our approach
Our approach
Carve Outs are about business and financials … but not only that…
We approach Carve Outs not only via thehard stuff:
Focus on PeopleFocus on EngagementFocus on Communication
Focus
Focus on PeoplePeople do the workPeople are the voice and representatives of the companyPeople make the differenceEmployees need respect & recognitionEmployees are valuable
Focus
Focus on EngagementManagement lead by example (certainly in times of tension, change …)Management inspire employeesEngagement will lead to trustTrust is the foundation for teamworkTeamwork foresee in continuityEmployees will be engaged when thereis trust, results in cooperation and dedicationUtterly: To have a team that’s WILLINGto work WITH
Focus
Focus on CommunicationTransparant communication from top to bottom and up… Making clear agreements and goalsInform the target group on a regurarly basesTake time for an informal walk & talkCelebrate succesCommunication result in commitment
Hard Stuff – General approach
Overall Goals of Carve Out
Maintain, regain trust from stakeholders (employees, business partners, mgmt, customers, public)
Maintain, regain capacity to act (individually, as teams, as orginanisation)
Support Management leading in times of transition
Foster orientation in an ambiguous, threatening and therefore stressfull situation for the organisation
Foster a proactive spirit of optimism attitude in the relevant organisation
Change view on situation – to open perspective and opportunity mindset
Carve out the strengths of the to be sold company to be able to harvest and build on them inside the new company
Questions to manage a Carve Out
What are the major parameters and guidelines from the Selling Company for the divestment? Where do they come from?
What are the concrete specific, precise goals for the divestment beyond “achieving the greatest monetary value for the Selling Company”?
Who are the key-stakeholders, what are their main interests?
Who has set up the divestment time plan and based on what? What are the milestones in the process?
From the Selling Company’s management point of view, what’s possible/thinkable? What’s not?
How much involvement of /participation of /openess to the affected management/organisation is acceptable? If none, what speaks against partially involving?
What’s the magnitude of trust in the loyalty of affected managers? Why?
What are the greatest risks in the divestment process? What’s planned to prevent them from happening?
Stakeholders and Interests•Price/Max value for the business•Continuity of the sold business•How to keep employees in business and motivated•Reach an agreement with the buyer, and what’s acceptable for employee representatives•Keep the time of insecurity as short as possible
Selling Company- To be sold organisation- To be sold mangement
•Get the best package/result for the to be sold organisation•Balance the interest of remaining and leaving employees = Tension Field!!•Stay with the organisation – avoiding the unknown•Respect from the selling organisation•Clarity and transparancy during the sales process•Securing the health of the NewCO
Employee RepresentativesAffected Employees
•Gain maximum value for money•Understanding of the business•Reach maximum transparancy about the to be bought business•Strenghts/Weaknesses of the business•Strategic fit•Keep the time of insecurity as short as possible
Potential Buyers
Types of Carve Out
Stand-alone carve-outCarve-out object as a stand-alone organization without integration into the buyer
Merger carve-outThird party organization as buyer of the carve-out object
Joint venture carve-outFusion of two equipollent organizations to a new organization
Phases of Carve Out
Emotional journey
Personal/IndividualProcessing
Team/Organisational Processing / Sales
Prep
Buyer announcement
Prepare for buyer & integration
Day One – Legal Transfer
Time
Capa
city
to A
ct
Phase 1Pre-
announcement of selling intention
Phase 2Announcement of selling intention
Phase 3Buyer Search
Phase 4Buyer
annoucement
Phase 5Integration preparation
Phase 6Day One
Phases IT Carve Out
IT Carve Out Strategies
Retention: IT remains at the parent company
Transition: IT of the acquiring company is used
Greenfield: IT is built from scratch
Carve Outs
StrategySelling
organizationSubsidiary
Buying organization
Transition Data extraction
• Business & IT staff training
• Business process adjustments
• IT adjustments• Data import
New-build Data extraction
• Business & IT staff training
• Business process adjustments
• Data import
• Interface development
Retention Data access separation
• Interface development
• Interface development
Ideal IT cooperation model
IT elemens effected by carve out
Data ClassesData class Criticality criterion
Personal data
• Critical according to the organizations guidelines and/or data protection regulations of the governments
• Critical if data is kept in a personal data IT system (person’s name in conjunction with birth date, salary, biography, etc.)
• Not critical if data reveals general communication details (e.g., E-mail, addresses, company phone number, user identification)
Organizational data
• Critical if classified as being critical by at least one of the participants due to business interests
• Critical if data is considered confidenfial or secret• Critical if data is internal but business departments decide it has to be
accessed exclusively• Not critical if data is publicly available
Anti-trust data • Critical if data allows conclusions about non-public information of an organization's competitive behavior, business areas, internal details (e.g., purchase price, order quantity, delivery conditions, investments, research)
Third-party data• Critical if data has to be treated confidenlialy in regards of a third
party (e.g., supplier product design data, testing results, delivery reliability)
• Critical if data reveals information about the quality of third parties products and services (e.g., quality reports)
General workstream 1
General workstream 2
IT Workstream plan
IT Workstream
template application intakeName of the application
Frequency of use
User groups
Age of the application
Underlying and used technology
Input data from other systems used by the application
Application architecture (standalone or highly integrated)
Business relevance (business critical or business support for IPS)
Number of licenses
Application owner
Location where the application is used and hosted
Justification for application use (reason for keeping application alive at IPS)
Lessons Learned from IT Carve Outs
1. Build collaboration between the seller's carve-out team and the buyer's integration team
2. Allocate resources dynamically, leveraging external recources
3. Devote special attention to local differences
4. Design flexibility into Transitional Service Agreements
5. Establish a dedicated team to manage retention and support personnel transfers
6. Facilitate awareness of business dependencies on IT
7. Include IT leaders in strategic decision-making teams
8. Routinely review IT standardization and customization trade-offs
9. Maintain full and up-to-date documentation on the IT landscape
10. Include retention clauses in contracts for key IT personnel
Managing Carve-out Projects
Creating a Divestiture-ready IT Enviroment