Carveout transactions require separating technology that was never designed to be separated. Understanding entanglement depth is critical for realistic planning.
Carveout Challenges
Shared Infrastructure
- Common data centers and cloud accounts
- Shared network infrastructure
- Enterprise-wide security systems
- Common development environments
Entangled Applications
- Shared ERP and business systems
- Common customer databases
- Integrated reporting systems
- Shared APIs and services
Data Complexity
- Determining data ownership
- Separating shared customer records
- Historical data access needs
- Ongoing data sharing requirements
TSA Considerations
Typical TSA Services
- Infrastructure hosting
- Application access
- IT support
- Security monitoring
- Development resources
TSA Risks
- Seller motivation to end quickly
- Service level degradation
- Cost escalation
- Knowledge transfer gaps
- Extended dependency risk
Separation Planning
- Day 1 minimum viable separation
- 90-day critical path items
- TSA exit milestones
- Stranded cost management
- Independent operation target state
Key Takeaway: Carveout separations typically cost more and take longer than expected. Build 50-100% contingency into separation timelines and budgets.