Cross-border carve-outs 2020:

Why one third fail and how to get them right

08 April 2020

TIME REALLY IS MONEY

Why does an average 16% of deal value drain away when overruns last more than four months?

Carve-outs have become increasingly popular among global dealmakers – with a threefold increase in volume since 2016. And, post COVID-19, this impetus should continue as a mixture of pent-up demand, distressed and non-core assets and lower valuations lure cash-rich private equity firms and corporates back to the deal table.

However, Cross-border carve-outs, a new independent market research study commissioned by TMF Group, suggests that dealmakers could be losing substantial amounts of money due to avoidable delays and a disregard for the three fundamentals of successful carve-outs.

The survey reveals that a significant number of deals still take too much time: 19% of corporate respondents and 24% of PE firms say their most recent deal took longer than expected.

Those delays can push up costs – by an average 16% of deal value for overruns longer than four months, according to our study.

The report identifies three keys to cross-border carve-out success:

  1. Local presence: 76% with a moderate to well-established presence have mostly successful outcomes.
  2. Realistic timetable: 84% of deals completed within four months were mostly successful.
  3. Robust preparation: 78% of corporates and 64% of PE firms say delays in completion could have been avoided with more preparation.

To find out more, download the report

A tablet, phone and laptop showing the Corporate Secretarial GBCI publication

About our M&A deal completion services 

TMF Group works with alongside global transaction advisors to ensure deal fatigue doesn’t set in when it comes to the final hard yards of full entity activation and operational readiness – that’s wherever a complex, cross-border carve-out needs to do business, no matter how fragmented the footprint. 

With a full-service capability in local tax compliance, HR admin and payroll and company secretarial across 120 wholly-owned offices worldwide, we are your answer to any client who asks: “why can’t I just copy what the seller is doing in each country and leave it there?” 

Download the report

Download here

About TMF Group:

TMF Group is the leading provider of administrative support services for international business expansion. With some 7,800 experts – in-house, on the ground in over 80 locations – it is the only company worldwide to provide the combination of fiduciary, company secretarial, accounting tax and HR and payroll services essential to the success of businesses investing, operating and expanding across multiple jurisdictions.

We know how to unlock access to some of the world’s most attractive markets – no matter how complex – swiftly, safely and efficiently. That’s why over 60% of the Fortune Global 500 and FTSE 100, and almost half the top 300 private equity firms, use us.