Case Study – Global Tier I Automotive OEM supplier
Services provided

Business Unit Divestiture

The Liberty team was able to provide the right level of guidance and execution for the large divestiture of a top tier automotive manufacturer's business unit while successfully mitigating the risks that come with a complex carve out.

overview

A long-standing client engaged Liberty to advise and execute the carve out of two business units sold to foreign entities for over $800M. Our team was able to successfully execute the two parallel transactions while protecting the seller's interests.

The Business Problem

Our long-standing client, a Global Tier I Automotive OEM supplier, decided to carve-out and divest one of its business units in order to invest in higher margin product categories. They split the Division and sold it to two separate foreign entities in parallel transactions exceeding $800 million. Liberty was engaged to manage IT Separation activities and to ensure the Buyer received ongoing services in accordance with the TSA (Transition Services Agreement), while minimizing risk and impact on the Seller’s daily operations.

The Outcome

Liberty quickly engaged the client’s Separation lead and mobilized the IT SMO (Separation Management Office). Interfacing daily with the Buyer, Seller (client), and a number of IT service providers, our team was responsible for completing separation as well as the delivery of support services following transaction close. Separation strategies were discussed and agreed upon with the Seller’s executives and communicated to the Buyer and relevant service providers. A cadence was established between all parties to communicate separation progress as well as the status of the Buyer’s ongoing change requests and system functionality enhancements.
Significant care was taken to avoid disruption to the Buyer’s business while they underwent infrastructure changes as well as the onboarding of new service providers. Our primary focus throughout the engagement was minimizing risk to the Seller’s environment during physical separation.

Reduced Risk

Liberty delivered value throughout the divestiture process in three key areas:

  • Risk Mitigation: The continuity of the Seller’s Network and ERP connections during separation activities was critical. One global ERP system alone processed $30 million in daily transactions. Liberty’s diligent involvement ensured any configuration changes made to the Seller’s environment would not negatively impact business operations.
  • Fee Protection: The Seller collected over $25 million in IT TSA fees over the course of the 18 month period post-close, all of which was predicated on the successful delivery of the agreed upon TSA services.
  • Executive Alignment: Liberty’s presence ensured continued adherence to the guiding principles set forth by the Seller’s executive team – compliance with the TSA while minimizing business impact and risk. Regular checkpoints and effective communication practices enabled the executive team to focus on forward-looking enterprise strategy, and not on the day-to-day responsibilities of the Separation Management team.

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