A company will hire B-management to handle a spin off or carve out transaction, as it plans to organize a business entity as an independent company. B-management core mission will consist in transforming the division into a profitable stand alone company with its own management, customers and resources. Ultimately, B-management will look, jointly with the managers, for a suitable shareholder, able to support financially and strategically the newly formed entity.
The assignment will be handled by one or several managers according to the scope of the mission. A first manager will analyze the steps towards a new organization. It can start from the organization of “support services”, as treasury, HR and IT often through agreements with the former headquarter. He will also assess the management skills and recommends any change or addition.
More important will be, both, maintaining on going strong agreements with suppliers, in order to maintain competitive conditions, and the review of the existing customer base. The new company might keep commercial links with its former shareholder for a limited period of time, as well as growing a new customer base. Accordingly a specialized manager might be assigned to this task reviewing market opportunities, existing customer base and pricing conditions. He will build the commercial plan.
Ultimately, a plan will assess financing needs provided either by the departing shareholder or the incoming one. The challenge of any spin off assignment appears as driving the new company towards a long term future supported by adequate management and shareholders.