How Private Equity Carves a Business Out of a Company
Ryan Milligan and Kevin Gorman of ParkerGale break down the fundamentals of executing corporate carve-outs in private equity. They examine how to evaluate non-standalone financials, choose between asset and stock purchases, negotiate Transition Services Agreements (TSAs), manage the dual loyalties of acquired executive teams, and leverage AI in due diligence without getting buried in document sprawl.
- ParkerGale deployed machine models to extract assignment rights, change of control terms, and annual contract values across every customer contract in a corporate carve-out. Read →
- Corporate carve-out leaders sit between two masters: fiduciary duties to the seller and incoming employment with the private equity buyer. Read →
- Kevin Gorman and Ryan Milligan at ParkerGale identify a pricing inversion between due diligence and deal closing: buyers claim standalone operating costs will be severe to push down enterprise value, then turn around and demand minimal transition service fees from the parent. Read →
- In corporate carve-outs, sellers present contribution margin packages that exclude corporate overhead, leaving buyers acquiring what Kevin Gorman terms "something less than a fully operating company from a larger parent." Read →
- Carve-outs force buyers into zero-based budgeting because corporate sellers rarely transfer existing vendor contracts intact, requiring each operational expense to be justified from scratch. Read →