Carve-Out And Merger Integration

Carve-outs and merger integrations are where deal value is either captured or quietly lost. The deal model assumes a clean separation, a smooth Day 1, and synergies that materialize on schedule. Reality is messier. Entanglements run deeper than anyone mapped. Transition services agreements stretch longer and cost more than the LOI projected. Stranded costs surface in the parent. Integration teams stall on the org design question while the value capture clock keeps running. By the time the issues are visible on a steering committee slide, the window to act cheaply has already closed.

Stonehill is built for the middle market sponsor, corporate development team, or operating partner who needs the work done right the first time — without the headcount, hand-offs, and overhead of a Big Four engagement. We embed senior practitioners who have personally led carve-outs and post-merger integrations, not coordinated them from a deck, directly inside your separation or integration management office. We bring a Design Thinking methodology to the questions other firms try to answer with templates: what does the standalone operating model actually need to look like, where are the entanglements that will surprise you, and what does Day 1 readiness mean for your specific deal. We are the firm that makes middle market mergers work.

Our Carve-Out and Merger Integration Services

• Pre-Deal Carve-Out Diligence and Separation Planning - Whether you are on the sell-side preparing a divestiture or on the buy-side underwriting a carve-out from a corporate parent, the diligence period is where the separation perimeter, TSA scope, and one-time costs are either pinned down or left to chance. We map entanglements across people, contracts, IT, and shared services; build defensible standalone cost models; and pressure-test the carve-out thesis before the SPA gets signed. The output is a separation blueprint your team can execute against, not slideware.

• Integration Strategy and Synergy Realization - The integration thesis in the IC memo and the integration plan that survives Day 1 are rarely the same document. We translate the value creation case from the deal model into workstream-level synergy targets, owner assignments, and a tracking cadence that holds through the transition. For PE sponsors, that means revenue and cost synergies that show up in the LBO model. For corporate buyers, it means the strategic rationale gets executed, not just announced.

• Separation and Integration Management Office (SMO / IMO) - The management office is the governance backbone of any carve-out or integration. We stand up and run the SMO or IMO on your behalf — workstream charters, decision rights, RAID logs, and the steering committee operating rhythm. Our embedded leads serve as your interim integration director or carve-out lead through close, and stay through TSA exit when the engagement calls for it. Your team keeps its attention on running the business while we run the program.

• Transition Services Agreement (TSA) Design and Exit - The TSA is where most carve-outs lose money quietly — services priced too low for the seller, scoped too narrowly for the buyer, and exited later than anyone planned. We work both sides: structuring TSAs that protect Day 1 operational continuity without trapping either party, and driving disciplined TSA exit programs that close services on schedule and eliminate stranded costs at the parent. We coordinate with legal, finance, and IT so the TSA schedule reflects what the business actually needs, not what looked reasonable at signing.

• Day 1 Readiness, 100-Day Execution, and Standalone Operating Model - Day 1 is a binary event. Either the carved-out business can sign contracts, run payroll, take orders, and close the books on its own, or it cannot. We drive the Day 1 readiness checklist across finance, IT, HR, and commercial functions, then carry the same team into the 100-day plan and the buildout of the standalone operating model. For integrations, the same discipline applies in reverse — the acquired business is folded into the buyer's operating model on a timeline that protects the front line.

Why Stonehill

Stonehill works the way middle market sponsors and operating partners actually want to work: senior people, embedded inside the deal team, accountable for outcomes rather than billable hours. Our practitioners have led carve-outs and post-merger integrations across financial services, consumer, industrials, and tech-enabled services — for portfolio companies of leading private equity firms and for corporate clients including Valley National Bank, PODS, FIS, The Melting Pot, Red Bull, and Starbucks Latin America. We bring the rigor of a transaction-grade firm and the agility of a boutique, which is the combination most middle market deals actually need.

If you are diligencing a carve-out, planning a Day 1, or staring at a TSA exit deadline that is closer than your team is ready for, we should talk. Reach out for a working session — we will come prepared with a view on your situation, not a generic capabilities deck.