IT transition for carve-out acquisition

 The client

A Chinese government-owned enterprise was in the process of acquiring a $750 million carve-out of a tier 1 automotive supplier. The carve-out was a global division of a $36 billion supplier with 18 sites and 3,000 employees.

The challenge

Prior to closing the deal, the Chinese investors engaged our team to develop the IT portions of the purchase agreement and the Transition Services Agreement (TSA). Additionally, our experts developed the budget and plans to transition the business to the buyer’s systems in 12 months. This includes transitioning to a new email system, human resource system, voice and video conferencing systems, and ERP systems. Several sites needed to be transitioned off of the seller’s IT systems within 60 days and all software licensing was required in 4.5 months after purchase.

The solution

We reviewed the information provided by the buyer and the seller and conducted on-site assessments of IT assets and the needs for key sites. Accordingly, the team vetted the seller’s IT systems, process equipment, and over 600 applications to determine which would be included in the TSA, transferred with the purchase agreement, or acquired separately. We then facilitated the transfer of applicable software and selected additional replacement software, including a new ERP system.

The benefit

Our team successfully assisted the buyer in completing an agreement and TSA that was accepted by both parties. The transition of initial services and sites was completed within the required 4.5 months, and implementation of a new ERP system for one site was achieved in 60 days. The team also provided a budget and plan that permitted the transition implementation process to internal staff in under six months from the project initiation, ahead of the desired 12-month deadline.