Use this template to document every critical aspect of the carve-out’s future operating model. Populate each field once the design decisions are agreed and obtain Steering Committee sign-off before detailed implementation planning begins.
Purpose and Strategic Anchors
- State the TOM’s objective in one sentence.
- List the top three strategic priorities the design must enable (for example: customer intimacy, cost leadership, digital innovation).
Organization Structure Snapshot
- Provide a one-page org chart (Level 1–3).
- Record total headcount and SG&A budget assumptions.
- Identify open leadership roles and target hire dates.
End-to-End Process Landscape
- Enumerate the core value streams (order-to-cash, procure-to-pay, record-to-report, etc.).
- Assign process ownership to functions or roles.
- Flag any processes temporarily covered by TSAs.
Technology Architecture
- List primary systems for ERP, HCM, CRM, data analytics, and cybersecurity.
- Note whether each system is new, migrated, or temporarily provided via TSA.
- Include planned go-live dates and high-level integration points.
Governance and Decision Rights
- Define the governance forums (daily huddles, weekly operational review, monthly performance board).
- Specify decision-making authority for investments, pricing, hiring, and risk escalations using R-A-C-I tags.
Service-Level Standards
- Capture the key operational KPIs with baseline targets for Day 1.
Example metrics:
– Order accuracy ≥ 99.5 %
– On-time supplier payment ≥ 95 %
– IT system uptime ≥ 99.8 % - Note the data source and reporting cadence for each KPI.
People and Culture Enablers
- Summarize critical capabilities to recruit or develop (digital marketing, supply-chain analytics, Lean operations).
- Highlight culture themes and leadership behaviors to reinforce during onboarding.
- Outline the first-year learning and development roadmap.
Risk and Compliance Framework
- List top operational risks with mitigation owners.
- Confirm required certifications, licenses, and regulatory filings.
- Specify internal-control standards (SOX, ISO 27001, GDPR, etc.).
Implementation Roadmap
- Break the journey into three waves.
Wave 1: Day 1 minimum viable operations.
Wave 2: TSA exits and efficiency gains.
Wave 3: Strategic growth and optimization initiatives. - Provide milestone dates, budget ranges, and accountable leads for each wave.
Approval and Change Control
- Capture sign-offs from the CEO, CFO, and PMO Lead with date stamps.
- Describe the process to log and approve any future TOM changes (template reference, owner, approval threshold).
Complete this blueprint before launching cutover rehearsals. Update the document after each major milestone to keep all teams aligned on the target state and the path to reach it.
Request the Carve-Out Playbook
Table of Contents:
Table of Contents
1. Introduction and Overview
- 1.1 Purpose of This Playbook
- 1.2 Defining Carve-Outs (Divestitures)
- 1.3 Key Differences Between Carve-Outs and Other M&A Transactions
- 1.4 Common Drivers and Strategic Rationale for Carve-Outs
- 1.5 Overview of the Carve-Out Lifecycle
- 1.6 How to Use This Playbook
2. Strategic Considerations and Decision-Making
- 2.1 Evaluating the Carve-Out Rationale
- 2.2 Assessing Market Opportunities and Timing
- 2.3 Stakeholder Alignment and Governance
- 2.4 Risk Assessment and Mitigation Strategies
- 2.5 High-Level Financial Considerations
- 2.6 Sample Template: Carve-Out Feasibility Study
- 2.7 Checklist: Key Questions to Ask Before Deciding on a Carve-Out
3. Planning the Carve-Out Program
- 3.1 Establishing the Carve-Out Program Management Office (PMO)
- 3.2 Defining Scope and Objectives
- 3.3 Organizational Structure and Key Roles
- 3.4 Timeline Development and Milestone Planning
- 3.5 Resource Planning and Budgeting
- 3.6 Program Governance and Steering Committees
- 3.7 Tools and Templates: Carve-Out Project Charter and Planning Documents
- 3.8 Step-by-Step Guide: Setting Up the PMO
4. Financial Analysis and Preparation
- 4.1 Developing Carve-Out Financials (Pro Forma Statements)
- 4.2 Allocating Corporate Overheads
- 4.3 Working Capital Adjustments and Cash Management
- 4.4 Tax Implications and Structuring
- 4.5 Valuation Approaches for the Carve-Out Entity
- 4.6 Checklist: Financial Data Requirements
- 4.7 Template: Standalone Cost Analysis
5. Operational Separation and Target Operating Model (TOM)
- 5.1 Defining the Future State Organization
- 5.2 Critical Business Functions to Separate
- 5.3 Retained vs. Transitioned Capabilities
- 5.4 Cross-Functional Dependencies
- 5.5 Service Level Agreements and Transition Services
- 5.6 Template: Target Operating Model Blueprint
- 5.7 Step-by-Step Guide: Designing Your TOM
6. Legal and Regulatory Framework
- 6.1 Understanding Legal Entities and Corporate Structures
- 6.2 Regulatory Approvals and Filings
- 6.3 Contract Assignments and Renegotiations
- 6.4 Employee and Labor Law Considerations
- 6.5 Antitrust and Competition Law Considerations
- 6.6 Securities and Exchange Requirements (If Applicable)
- 6.7 Sample Template: Legal Due Diligence Checklist
7. Human Capital and Organizational Readiness
- 7,1 Workforce Mapping and Allocation
- 7.2 Talent Retention and Employee Engagement
- 7.3 Compensation and Benefit Alignments
- 7.4 Cultural Considerations and Change Management
- 7.5 Checklist: HR-Related Actions for Day 1 Readiness
- 7.6 Step-by-Step Guide: Conducting Workforce Transfers
8. Technology and IT Separation
- 8.1 IT Carve-Out Strategy and Guiding Principles
- 8.2 Inventory of Applications and Infrastructure
- 8.3 Data Migration and Security
- 8.4 Network and Systems Separation
- 8.5 Third-Party Vendor Contracts and Licensing
- 8.6 Checklist: Key IT Systems and Separation Activities
- 8.7 Sample Template: IT Separation Work Plan
9. Communication and Stakeholder Management
- 9.1 Communication Strategy and Governance
- 9.2 Internal Stakeholder Mapping
- 9.3 External Stakeholders: Investors, Clients, and Suppliers
- 9.4 Media Relations and Public Announcements
- 9.5 Message Alignment and Consistency
- 9.6 Change Management and Cultural Integration
- 9.7 Template: Comprehensive Communication Plan
10. Day 1 Readiness Planning
- 10.1 Defining “Day 1” Scope and Objectives
- 10.2 Critical Systems and Operational Checklists
- 10.3 Transition Services Agreements (TSA) Setup
- 10.4 Compliance and Regulatory Obligations
- 10.5 Business Continuity Plans
- 10.6 Template: Day 1 Checklist
- 10.7 Step-by-Step Guide: Ensuring Operational Continuity
11. Transition Services Agreements (TSAs)
- 11.1 Purpose and Structure of TSAs
- 11.2 Key TSA Terms and Service Level Definitions
- 11.3 Pricing and Cost Allocations
- 11.4 Governance and Conflict Resolution Mechanisms
- 11.5 Exit Strategy and TSA Sunset Provisions
- 11.6 Checklist: TSA Negotiation Points
- 11.7 Sample Template: TSA Master Document
12. Carve-Out Implementation and Execution
- 12.1 Integrated Project Plan for Separation
- 12.2 Managing Parallel Workstreams
- 12.3 Risk Management and Issue Resolution
- 12.4 Real-Time Reporting and Steering Committee Updates
- 12.5 Escalation Procedures and Decision Rights
- 12.6 Checklist: Weekly and Monthly Reporting Templates
- 12.7 Step-by-Step Guide: Project Execution Best Practices
13. Post-Close Stabilization and Operational Handover
- 13.1 Post-Close Governance and Operational Setup
- 13.2 TSA Management and Transition Offloading
- 13.3 Synergy Realization and Cost Management
- 13.4 Performance Tracking and KPIs
- 13.5 Revisiting the Target Operating Model
- 13.6 Checklist: Stabilization Milestones
14. Integration or Standalone Acceleration
- 14.1 Evaluating Long-Term Strategic Options
- 14.2 Standalone Strategy vs. Full Integration
- 14.3 Operational Maturity Roadmap
- 14.4 Value Creation Levers and Growth Opportunities
- 14.5 M&A Opportunities and Bolt-On Acquisitions
- 14.6 Checklist: Building Momentum Post-Carve-Out
15. Lessons Learned and Best Practices
- 15.1 Common Pitfalls and How to Avoid Them
- 15.2 Key Success Factors for Carve-Out Transactions
- 15.3 Industry-Specific Considerations
- 15.4 Checklist: Continuous Improvement for Future Carve-Outs