Situation

A private equity sponsor acquired a North and Latin American ingredients business from a multinational parent. The transaction valued the business at $1.7B with manufacturing operations across the region and 1,700 employees.

The deal required full separation at close with no transition service agreements. The business would need to operate entirely independently from day one, with no fallback to the parent. But independence did not mean a clean break. Long-term supply contracts were agreed in both directions, binding the two organisations together long after the transaction closed. Both parties needed confidence that the operational relationship would be stable.

The separation centred on a single global SAP instance. The acquired business covered North and Latin America, but the parent's operations in Europe and Asia Pacific ran on the same system. The cutover would affect all regions: ramp down and ramp up had to be coordinated globally without disrupting the parent's continuing business.

Approach

Due to the high complexity in manufacturing operations and the long-term interdependencies, we recommended proving the business could operate before change of control. Run the business independently for two full monthly cycles prior to legal close. Surface any gaps while there was still time and leverage to address them.

We ran the Separation Management Office for the carve-out and operational stand-up. A dedicated separation lead owned the programme across global functions, regions and time zones. Governance, delivery cadence and reporting lines were installed to maintain pace and surface risks early.

We isolated and sustained operations within the SAP environment, carved out manufacturing, finance and supply chain execution across multiple sites, and activated business functions that had never operated outside the parent company's infrastructure. The cutover was coordinated globally to protect the parent's continuing operations in Europe and Asia Pacific.

The proving period was not a simulation. The business ran live, under load, serving customers and managing supply chains while demonstrating it could operate without the parent and alongside them for the long term.

Results

The business ran independently for 60 days without disruption. Manufacturing, finance and global supply chains remained stable throughout. The parent's operations continued unaffected. Close completed on schedule with no post-close stabilisation required.

The sponsor entered ownership with full visibility into operational independence and confidence in the long-term commercial relationship with the seller.