Before you sign, you’ll know what it takes for the division to run on its own, and what it will cost. Then we run the separation, so everything critical works on Day 1 and you stop paying the parent for services you no longer need.
Before signing through TSA exit
Standalone in as little as 4–5 months
Separation plan, TSA terms and exit plan, Day 1 cutover and standalone IT
Sponsors buying a division of a larger company
Diligence
Day 1
TSA exit
Integration
IT carve-out consulting is the work of separating a division’s technology from its parent company and standing it up as a business of its own. It covers the systems, data, security and support the new company needs, from the first look in diligence through Day 1 and the end of the transition services agreement (TSA).
The risk in a carve-out is rarely the deal model. It’s the execution: a Day 1 that disrupts customers, a TSA that runs long and separation costs nobody tracked. Our senior operators have run 14 carve-outs for private equity sponsors, and keep all three under control by running the program management office (PMO) for the whole separation, not just the IT.
Which people, systems and contracts come with the business, and which stay with the parent?
What time, cost and effort will an independent IT environment take?
How will the division’s data and applications be separated cleanly?
What has to work on Legal Day 1 to keep the business running?
What will the parent keep running, for how long, and at what price?
Can the new environment carry the growth plan?
Four disciplines that run together from diligence to TSA exit, so the plan, the budget and the cutover stay in step.
The perimeter: people, systems and contracts
Day 1 risk and dependence on the TSA
Stranded costs and one-time separation spend
A standalone cost model and value creation plan
What exactly are we buying?
What will it cost to stand up?
Target operating and technology model
Day 1 cutover plan and continuity controls
TSA scope, governance and exit roadmap
A 100-day stabilization plan
What has to work on Day 1?
Where should the business end up?
A separation office with clear authority
Decisions, risks and issues tracked weekly
One-time and run-rate cost tracker
TSA management with the parent
Who decides, and how fast?
Is separation spend on plan?
Finance, HR and core process stand-up
ERP separation or migration
Identity, security and infrastructure separation
AI tools, AI policy and data access set up for the new company
An IT support model: MSP, in-house or both
Can the business run without the parent?
Who supports it after the TSA?
Separation is the best moment to reset. We size the new environment for the company you’re building, not a copy of the parent’s, and that’s where much of the saving comes from.
On the day the deal closes, the new company has to run without asking the parent. We certify these before close, and agree in the TSA what the parent keeps running for now.
If any of these fail, customers, employees or suppliers feel it on day one.
Behind these sit detailed Day 1 checklists for every function, from ERP and email to payroll and facilities. We walk through them in a scoping call.
Pay its people
Payroll and benefits running under the new entity.
Bill and collect
Invoices out and cash in, from its own systems.
Pay its vendors
The ERP live to post transactions and pay suppliers.
Close the books
Record transactions, report and manage cash.
Work securely
Email, identity and MFA on its own domain, laptops ready.
Bank and insure
Banking signatories updated, insurance bound.
A carve-out doesn’t happen in one move. Each part of the IT stack goes from shared with the parent, to a temporary bridge under the TSA, to fully the new company’s own.
Shared with the parent
On the TSA bridge
Standalone
ERP and finance
Runs on the parent’s ERP and financial systems
Day 1 essentials live, parent access kept for history
Its own ERP and core systems
Identity and access
The parent’s directory, sign-on and security stack
Separate identities and access controls
Its own identity and security controls
Cloud and infrastructure
The parent’s cloud tenant and data center
A parallel tenant for the new company
Its own Azure or AWS environment
Email and collaboration
The parent’s email and collaboration tools
Email and files on the new domain
Its own collaboration platform, right-sized
Support and operations
Hosting and help desk run by the parent
Command center and TSA governance in place
Its own support model: MSP, in-house or both
Security and compliance
Covered by the parent’s program
TSA security dependencies documented and watched
A hardened program and compliance roadmap
How long the bridge lasts is set in the TSA, so we plan the exit before it’s signed.
A transition services agreement keeps the business running on the parent’s systems after close, for a monthly fee. Most TSAs run long because services were loosely defined, priced with no end date or never tracked. We shape the TSA before it’s signed, govern it after close and exit it service by service.
Every service defined, priced and dated, so each one can end on its own.
One governance rhythm with the parent, so issues get resolved and fees stay on budget.
Standalone systems built so services switch off early, and stranded costs come out as they do.
Every month off the TSA early is a month of fees the business keeps.
We set up and run the program management office (PMO) for the whole carve-out. That means one plan, one weekly meeting and one set of deadlines for every team involved: finance, HR, legal, IT and the rest, plus the parent company and your deal team.
Your deal team
Owns the thesis, terms and timeline
Steering committee
Sets priorities and makes the big calls
One office with the authority to run every workstream, from signing through Legal Day 1 to the TSA exit.
Finance
HR and payroll
Information technology
Legal
Tax and structuring
Facilities
TSA management
Synergy capture
Communications
Clean room
The PMO coordinates every workstream, the parent and your outside advisors, and we can bring in interim leads where a seat is empty.
The PMO hands you one integrated plan, a live cost tracker and a TSA exit plan, set up before close and kept current through Day 100.
Four phases, with the separation designed before anything moves, so there are no surprises heading into close.
How the new company runs on Day 1, where it should end up, and what transfers, is rebuilt or stays on the TSA.
A plan for each function, with Day 1 and Day 100 requirements and the dependencies between teams.
One milestone plan anchored to Legal Day 1, a weekly cadence and a live cost tracker.
Day 1 cutover from a command center, then the TSA exit, with savings tracked through Day 100.
Transition services keep the business running after close, but every month is paid to the parent. A separation that’s controlled from Day 1 gets onto its own systems early, and the fees stop.
$3.5M
in TSA fees avoided, at about $500K a month
Underwriting
Validate the standalone cost model before close, and find the TSA dependencies nobody listed.
Cost
Track one-time separation spend against the estimate, and cut stranded costs as services move.
Timeline
Certify Day 1 readiness, so the TSA can be shorter and the business settles faster.
Exit readiness
Leave a stable, audit-ready platform and a clean separation story for lenders and the next buyer.
In a carve-out, returns are usually lost in execution, not in the deal model. That’s the part we control.
Fourteen carve-outs so far, including a 23-brand separation. Here are three, and what one client said about working with us.
IT due diligence and synergy analysis on 23 brands carved out of a global consumer goods company, then a right-sized move from SAP and Fusion to Business Central and a post-TSA IT model built for the new company.
Read the case study →
A $500M division carved out of an $8B public company, with eight facilities on different ERPs and the CIO gone a week before close. We centralized the ERP within three months and stabilized IT.
Read the case study →
We ran the carve-out diligence, then led every separation workstream. The division moved onto its own Azure and Microsoft 365 environment, with NetSuite implemented in five weeks.
Read the case study →A strategic, roll-up-their-sleeves attitude that drives bottom-line IT and operational savings. Compello identified our gaps, recommended practical solutions, and ensured all parties executed.
VP Global Supply Chain, $150M food manufacturerSomething we haven’t covered? A partner can answer it on a short call.
IT carve-out consulting helps a buyer separate a division’s technology from its parent company and stand it up as a business of its own. It covers diligence on what the separation will take, the plan for Day 1, the transition services agreement (TSA) with the parent, and the move onto the new company’s own systems.
The goal is a business that runs without disruption on the day the deal closes, and stops relying on the parent as early as it safely can. See how it fits with the rest of our M&A IT services.
Carve-out diligence takes four to eight weeks before signing. After close, the timeline depends on the TSA and on how tangled the division is with its parent. In recent carve-outs, the business was running on its own systems in four to five months, in one case against a TSA planned for twelve.
The key dates are set early: what must work on Legal Day 1, what can wait for Day 100, and when each transition service ends.
On Legal Day 1, the new company has to pay its people, bill and collect from customers, pay its vendors, record transactions and report, and work securely on its own email, identity and devices. Banking and insurance need to be in place too.
Anything that isn’t essential on Day 1 is either covered by the TSA, with a plan and a date to exit it, or scheduled for the first 100 days.
By planning the exit before the TSA is signed. We help define each service clearly, with service levels, pricing and an end date, then build the standalone systems in an order that lets services end early. Weekly governance keeps the exit on track.
One manufacturing carve-out was off a 12-month TSA in five months, avoiding $3.5M in fees.
A schedule for every service the parent keeps providing, each with a clear description, service levels, a monthly price, a term and an end date. It should also set extension terms, how changes are requested, who governs the agreement on each side, and any reverse TSA where the parent needs services from the new company.
The tighter each service is defined, the easier it is to exit one at a time instead of all at once at the end of the term.
We estimate the cost in diligence: the one-time separation spend, the TSA fees and the standalone run-rate the business will carry. After close, a separation cost tracker measures actual spend against that estimate every week, and stranded costs are cut as services move.
Separation is also a chance to reset. Our IT carve-out services size the new environment for the company you’re building rather than copying the parent’s, which is how one 23-brand carve-out took $18M off the IT budget.
Yes. A carve-out touches finance, HR, legal, tax and facilities as well as IT, and every workstream has to be ready for the same Legal Day 1. We set up and run the program management office (PMO) across all of them: governance and decision rights, the integrated milestone plan, weekly risk and issue reviews, and the separation cost tracker, reporting to the steering committee and your deal team.
IT is the workstream we also run hands-on. For the others, we coordinate the functional leads, the parent and your outside advisors, and can bring in interim leads where a seat is empty.
The new company needs a support model of its own: an internal team, a managed service provider, or both. We help decide which fits and have it running before the TSA ends.
We can also stay on as the company’s managed IT provider, covering help desk, networks and security, as well as its ERP, so what we learned in the carve-out isn’t lost.
What the target’s IT will really cost to run, fix, separate or integrate, before you sign.
Security gaps, compliance the target can’t prove and the cost to fix, priced before you sign.
Whether the ERP can carry the investment thesis, before signing or after close.
Day 1 readiness, then moving the add-on onto the platform’s systems.
One office running every workstream for carve-outs, ERP integrations and other transactions.
AI readiness, maturity, governance and training, tied to EBITDA.
Start with a carve-out diligence: four to eight weeks, a standalone cost model, and a clear plan for Day 1 and the TSA exit.
