Cross-border carve-outs 2020:

Why one third fail and how to get them right

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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

We make a complex world simple

TMF Group is a leading provider of critical administrative services, helping clients invest and operate safely around the world.

With more than 10,000 colleagues in 125 offices across 86 jurisdictions, all working to the same high standards of service and security, we provide our clients with local expertise where it is needed most. Our locations cover 92% of world GDP and 95% of FDI inflow.

We are a key part of our clients’ governance, providing the accounting, tax, payroll, fund administration and legal entity management services essential to their success. We make sure rules are followed, reputations protected and operational compliance maintained.

Our global service model and technology platform put our clients in control of their portfolio of entities and global locations. The data insights we deliver keep them on top of emerging regulation, the status of their own activity and any points of risk.

We serve corporates, financial institutions, asset managers, private equity and real estate investors, and family offices. Our clients include the majority of the Fortune Global 500, FTSE 100 and top 300 private equity firms.

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