Carve-Outs & Divestitures
Preparing a business for a carve-out, spin-off or sale is a complex exercise that requires effective planning and strong execution. Critical to any carve-out process, including the spin-off of a subsidiary, are deep technical knowledge and analytical skills around not just the tactical extraction and separation process, but also the various regulatory and accounting requirements to be addressed in executing the transaction.
Two companies, two (or more) SAP software systems: ideally the merged synergies in the infrastructure can be used to improve the handling of common processes. When viewing specific business cases and synergy effects, these projects appear to make sense from a business standpoint. As such, the success of such projects is increasingly dependent on the IT-department.
When companies sell off business units, they are now more likely to separate the data for the divested units from their production SAP landscape. Many sales agreements require the data for the transferring business unit to be handed over in an SAP system.
A more reliable alternative is a specialized, tried-and-tested tool like SNP Transformation Backbone, which transfers all specified data to the divested unit‘s system.
Experience has shown that companies whose business is well-aligned with IT see above-average success when carrying out carve-outs and M&A transactions. By focusing on business goals and having a comprehensive understanding of business processes, the IT-department can implement the necessary changes with more flexibility and less friction. The better the cooperation is between IT and other departments, the greater the entire project‘s chances of success.
Mergers & Acquisitions Activities 2015
In 2015, global merger and acquisition activity exceeded $ 5.2 trillion, making it a record-setting year. As one company seeks to onboard and integrate a new acquisition, the original owner seeks to spin it off in the shortest possible time. Since divestitures are not considered everyday business for most organizations, they typically land on the CIO’s already-full plate. Transformation projects such as carve-outs or mergers & acquisitions (M&A) represent some of the greatest challenges to companies and their IT-departments. When viewing specific business cases and synergy effects, these projects appear to make sense from a business standpoint. As such, the success of such projects is increasingly dependent on the IT-department. So strengthen your position.
In order for the factory in Brazil to better tailor its business processes to local clients, the companies management decided to convert the centralized SAP ERP system to its own local solution. Norske Skog’s IT-department was tasked with carving out the Brazilian factory from the centralized SAP ERP system. For this complex project, which had just one weekend to go live, and where the cost accounting currency also needed to simultaneously be switched from US dollars to Brazilian reals, Norske Skog got help from SNP.
As a result of the merger between the power plant divisions of Mitsubishi and Hitachi, the former Hitachi Power Europe GmbH in Duisburg was renamed Mitsubishi Hitachi Power Systems Europe GmbH and commenced operation on February 1, 2014. Four of the 58 companies affected by the merger are located in Germany.