Oct
31

Divestiture and Business Carve-out Technology Considerations

Mergers and acquisitions continue to be prominent in today?s public corporate and private equity space. A significant challenge to most organizations that are in the market to acquire or divest a business unit is how to address the Information Technology requirements. Unlike an acquisition whereby the entire company is being acquired, an acquisition of an individual business unit(s) poses unique challenges particularly in the case where it resides in a well-integrated, efficient technical environment. Rarely can a business unit be turned over to the purchasing organization on Legal Day 1, but instead a Transition Services Agreement (TSA) must be developed between the two organizations which stipulates the seller to continue providing the computing environment for a period of time while the buyer executes the plan for integration into their own environment. With incre liquid diet drops asing focus on individual privacy, and threats from malicious sources to gain access to individual?s information or corporate proprietary information, the importance of planning technology isolation during the TSA period has increased exponentially. This isolation is equally important to the organization that is selling the business unit as to the organization that is acquiring the unit to protect the interests of both parties and is required in regulated industries. The most important, yet often challenging, step to a successful divestiture and impending acquisition of a business unit is to have a clear understanding of what encompasses the transaction. It is critical to have the application disposition defined, detailed inventory of the technology assets included sale, and the physical locations of the employees affected by the sale to develop an isolation strategy.

Comments are closed.