Divestitures and Spin-Offs: Lessons Learned in the Trenches of the World’s Largest M&A Deals

468 Pages·2018·9.961 MB·English

by  Joseph Joy (auth.)

Management for Professionals
Joseph Joy
Divestitures
and Spin-Off s
Lessons Learned in the Trenches
of the World’s Largest M&A Deals
Management for Professionals
More information about this series at http://www.springernature.com/series/10101
Joseph Joy
Divestitures and Spin-Offs
Lessons Learned in the Trenches
of the World’s Largest M&A Deals
Joseph Joy
Deloitte Consulting LLP
San Jose, CA, USA
ISSN 2192-8096 ISSN 2192-810X (electronic)
Management for Professionals
ISBN 978-1-4939-7661-4 ISBN 978-1-4939-7662-1 (eBook)
https://doi.org/10.1007/978-1-4939-7662-1
Library of Congress Control Number: 2017964262
© Deloitte Development LLC 2018
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The registered company address is: 233 Spring Street, New York, NY 10013, U.S.A.
This book is dedicated to my mother,
Annamma Joy, my constant pillar of support.
Acknowledgment
The world of M&A has always been complex and nuanced, and our clients have
brought the toughest business problems to the table.
Divestiture and Spin-Offs: Lessons Learned in the Trenches of the World’s
Largest M&A Deals is a tribute to our clients who have trusted our brand to be part
of their M&A journey and the lessons learned along the way of doing most complex
M&A projects with them.
Being in the consulting business, we are accustomed to wearing an advisory hat.
We advise our clients on the best practices—blended with our tried and tested meth-
odologies. M&A is a different beast altogether. Separation and integration projects
demand working in close coordination bringing clients and consultants together.
The two-in-a-box model ensures that we are together as one team and is a true testa-
ment to the ingrained nature required for seamless execution.
This book is dedicated to some of the most amazing business leaders we’ve had
the fortune to serve. It is a walk down memory lane with some of these tenacious,
decisive business leaders we have worked with to help make those tough decisions
and take command and control when required all while recognizing their people and
trusting their teams. These leaders brought structure and calmness dealing with dif-
ficult situations, made personal sacrifices for getting the deal done, and did the right
things even when no one noticed.
My immense gratitude goes to the following for the crazy ride (in no particular
order): Christopher Paul Hsu, Scott Spradley, Swavek Bialkiewicz, Mike Dallas, Jim
Murrin, Franklin Grosvenor, Sergio Letelier, Shane Wailes, Jonathan Faust, Michael
Linford, Joseph Schulz, Adam Vazquez, Lalit Singh, Lisa Hicks, and Paul Raddon.
I would like to specially call out Christopher Paul Hsu for his leadership and
guidance and for being the inspiration behind this book. I would like to thank my
mentors – Ashish Goel, Matt Law, Edward Carey, Sam Balaji, Mark Walsh for their
continued guidance over the years. I want to sincerely thank my leadership at
Deloitte – Jeffery Weirens, Sandy Shirai, Trevear Thomas, Russell Thomson, Dave
Couture and Anthony Stephan – for their support in this endeavor.
This book would not have been possible without their support, friendship, and
collaborative effort throughout our careers in the M&A journey. This book is
vii
viii Acknowledgment
dedicated to all of our clients, for truly always being in the deepest of deep trenches
with us.
Given the rapidly changing merger, acquisition, and divestiture environment, it
was critical for the content in this book to be as timely and relevant as possible and
also to represent the collective 200 plus years of experience. It would be nearly
impossible to complete this work without support from below contributors who
have played a critical role in compiling their years of experience (contributors in
alphabetical order of the names):
• Abhimanyu Basu, Consultant, Deloitte Consulting LLP; Chapter 25, “Command
Center: Setting Up Round-the-Clock Monitoring During Cutover”
• Abhishek Mathur, Senior Manager, Deloitte Consulting LLP; Chapter 27,
“Transform as You Separate”
• Abhishek Shanker, Manager, Deloitte Consulting LLP; Chapter 27, “Transform
as You Separate”
• Ambar Patil, Senior Consultant, Deloitte Consulting LLP; Chapter 20, “Managing
the Application Separation Life Cycle”
• Ankit Shanker, Specialist Master, Deloitte Consulting LLP; Chapter 28,
“Managing Data Separation and Migration During a Divestiture”, Case Study 28
• Asish Ramchandran, Principal, Deloitte Consulting LLP; Chapter 35,
“Separation Management Office: Leading Practices”, Case Study 35
• Barry Chen, Senior Manager, Deloitte Consulting LLP; Case Study 15, Case
Study 33
• Bob Harman, Senior Manager, Deloitte Consulting LLP; Case Study 24, Case
Study 25
• Brandon Bonzheim, Tax Senior Manager, Deloitte Tax LLP; Chapter 17, “Legal
and Tax Aspects of Divestitures”
• Brian Pinto, Tax Partner, Deloitte Tax LLP; Chapter 17, “Legal and Tax Aspects
of Divestitures”, Case Study 17
• Carina Ruiz, Advisory Partner, Deloitte & Touche LLP; Chapter 16, “Managing
Banking and Treasury Implications During Divestiture”, Case Study 16
• Charlie Catino, Consultant, Deloitte Consulting LLP; Chapter 19, “Managing
Customer and Partner Transitions During a Separation”
• David Andrew Oberst, Advisory Senior Manager, Deloitte Consulting LLP;
Chapter 8, “Clean Financial Separation”, Case Study 7, Case Study 8
• Don Miller, Consulting Managing Director, Deloitte Consulting LLP; Chapter 13,
“Managing the People Side of Divestiture: Retention and Motivation”,
Chapter 14, “Shaking Things Up: Reorganizing”, Case Study 13, Case Study 14
• Doug Mesthos, Manager, Deloitte Consulting LLP; Chapter 9, “Building the
Arsenal: Setting Up an Effective Separation Team and Governance”
• Edward Carey, Management Principal, Deloitte Consulting LLP; Case Study 27
• Garima Dhasmana, Senior Manager, Deloitte Consulting LLP; Case Study 12
• Gaurav Dharmadhikari, Senior Manager, Deloitte Consulting LLP; Chapter 15,
“Legal Entity Operating Structure”
Acknowledgment ix
• Gaurav Pandey, Senior Consultant, Deloitte Consulting LLP; Chapter 32,
“Expediting TSA Exits to Enable Strategic Transformation”, Case Study 32
• Miguel Angel Gomez Cuentas, Manager, Deloitte Consulting LLP; Appendix A:
Divestiture Playbook Overview
• Habeeb Dihu, Principal, Deloitte Consulting LLP; Case Study 23
• Heiko Dorenwendt, Principal, Deloitte Consulting LLP; Chapter 13, “Managing
the People Side of Divestiture: Retention and Motivation”, Case Study 13
• Isha Tyagi, Consultant, Deloitte Consulting LLP; Chapter 2, “Taming the
Elephant: Introduction to Divestitures”
• Ishan Bansal, Manager, Deloitte Consulting LLP; Chapter 10, “Working Under
the Tent: Confidentiality and Restricted Information Disclosure”
• Jasneet Kanwar, Senior Consultant, Deloitte Consulting LLP; Chapter 25,
“Command Center: Setting Up Round-the-Clock Monitoring During Cutover”
• Jayson Gasper, Manager, Deloitte Consulting LLP; Case Study 24, Case Study 25
• Jeffery Weirens, Principal, Deloitte Consulting LLP; Chapter 9, “Building the
Arsenal: Setting Up an Effective Separation Team and Governance”
• Jeffry Sprengel, Specialist Leader, Deloitte Consulting LLP; Chapter 21,
“Simplifying IT Infrastructure Separation”, Case Study 21
• Jon Bowes, Partner, Deloitte Canada; Case Study 30
• Judith Onugu, Manager, Deloitte Consulting LLP; Chapter 15, “Legal Entity
Operating Structure”
• Justyna Charytoniuk, Manager, Deloitte Consulting LLP; Chapter 15, “Legal
Entity Operating Structure”
• Kapil Dixit, Advisory Senior Manager, Deloitte & Touche LLP; Chapter 16,
“Managing Banking and Treasury Implications During Divestiture”
• Karima Jivani, Manager, Deloitte Consulting LLP; Chapter 22, “Managing IT in
Divestiture: Orchestration, Instrumentation, and Measurement”, Case Study 22
• Karina Rivera, Manager, Deloitte Consulting LLP; Chapter 23, “Testing: Making
the IT Separation Foolproof”, Appendix A: Divestiture Playbook Overview
• Kaushik Ramasubramaniam, Senior Manager, Deloitte Consulting LLP; Case
Study 27
• Kavya Gollavilli, Senior Consultant, Deloitte Consulting LLP; Chapter 6,
“Slicing the Pie: Asset Allocation in Divestiture”, Chapter 11, “Getting Ready
for Announcement: Kickoff Planning”, Case Study 6
• Kenny Macdonald, Principal, Deloitte Consulting LLP; Chapter 14, “Shaking
Things Up: Reorganizing”, Case Study 14
• Kevin Laughridge, Principal, Deloitte Consulting LLP; Case Study 12
• Kristin Viger, Senior Manager, Deloitte Consulting LLP; Chapter 13, “Managing
the People Side of Divestiture: Retention and Motivation”, Chapter 14, “Shaking
Things Up: Reorganizing”, Case Study 13, Case Study 14
• Kunal Gupta, Manager, Deloitte Consulting LLP; Chapter 18, “Accelerating
Divestitures Through Minimal Rebranding”
• Latngenhun Nongsiej, Senior Consultant, Deloitte Consulting LLP; Chapter 24,
“Cutover: Getting Ready for the Launch”
x Acknowledgment
• Manav Dange, Senior Manager, Deloitte Consulting LLP; Case Study 11
• Manish Laad, Consulting Managing Director, Deloitte Consulting LLP;
Chapter 10, “Working Under the Tent: Confidentiality and Restrained Information
Disclosure”, Chapter 11, “Getting Ready for Announcement: Kickoff Planning”,
Chapter 21, “Simplifying IT Infrastructure Separation”, Chapter 26, “Protecting
the Organization During Vulnerable Times”, Case Study 10, Case Study 26
• Manu Ishino, Consultant, Deloitte Consulting LLP; Case Study 24, Case Study 25
• Maulik Mehta, Manager, Deloitte Consulting LLP; Chapter 4, “Upping the Ante:
Enhancing Deal Value”, Case Study 4
• Mayank Gupta, Senior Manager, Deloitte Consulting LLP; Chapter 23, “Testing:
Making the IT Separation Foolproof”, Chapter 30, “Transition Services
Agreements (TSAs): Approach to De-risk Divestitures”, Case Study 23
• Michael Dziczkowski, Advisory Partner, Deloitte Consulting LLP; Chapter 8,
“Clean Financial Separation”
• Michael von Rueden, Partner, Deloitte Germany; Chapter 17, “Legal and Tax
Aspects of Divestitures”
• Monalisa Saha, Manager, Deloitte Consulting LLP; Chapter 25, “Command
Center: Setting Up Round-the-Clock Monitoring During Cutover”
• Mushtaque Heera, Consulting Managing Director, Deloitte Consulting LLP;
Chapter 12, “Building the Execution Roadmap”, Chapter 20, “Managing the
Application Separation Lifecycle”, Chapter 22, “Managing IT in Divestiture:
Orchestration, Instrumentation, and Measurement”, Chapter 29, “Real Estate
and Site Separation”, Case Study 20, Case Study 22, Case Study 29
• Navneeth Srinivasan, Senior Consultant, Deloitte Consulting LLP; Chapter 34,
“Cost Reduction Through Outsourcing”
• Nikhil Menon, Senior Manager, Deloitte Consulting LLP; Chapter 4, “Upping
the Ante: Enhancing Deal Value”, Chapter 6, “Slicing the Pie: Asset Allocation
in Divestiture”, Chapter 18, “Accelerating Divestitures Through Minimal
Rebranding”, Chapter 33, “Managing Separation Costs, Stranded Costs, and Dis-
synergies”, Chapter 34, “Cost Reduction Through Outsourcing”, Case Study 4,
Case Study 6, Case Study 18, Case Study 34
• Ninad Deshmukh, Manager, Deloitte Consulting LLP; Chapter 31, “Contract
Separation: Early Identification and Negotiations”, Chapter 33, “Managing
Separation Costs, Stranded Costs, and Dis-synergies”, Chapter 34, “Cost
Reduction Through Outsourcing”, Case Study 34
• Olivier May, Principal, Deloitte Consulting LLP; Case Study 15, Case Study 33
• Premal Parikh, Manager, Deloitte Consulting LLP; Chapter 23, “Testing: Making
the IT Separation Foolproof”
• Rachael Chan, Consultant, Deloitte Consulting LLP; Chapter 31, “Contract
Separation: Early Identification and Negotiations”
• Raed Masoud, Senior Manager, Deloitte Consulting LLP; Chapter 7, “Financial
Aspects of Carve-Out”
• Rajesh Gupta, Manager, Deloitte Consulting LLP; Chapter 32, “Expediting TSA
Exits to Enable Strategic Transformation”, Case Study 32