While financial sponsors often exit to corporate acquirers, the sale occasionally flows the other way during corporate carve outs. The carve out strategy can be an effective way for larger corporations to refine their strategic focus or shed less profitable divisions, as Sears demonstrated yesterday when it announced the planned divestiture of its Auto Centers and Land’s End brands. But how do private equity firms identify attractive carve-out opportunities?
Axial has partnered with Privcap to offer free access to the below video, in which Edward Kleinguetl of Grant Thorton, Aaron Wolfe of Sun Capital Partners, and Adam Blumenthal of Blue Wolf Capital Partners explain the unique factors in considering a carve out opportunity. The three discuss characteristics of a valuable carve out investment, critical risks and due diligence questions, and how to transform an “under-loved” division into a “loved” standalone entity.