47% of carve-outs encounter timeline delays due to IT separation complexities
Our approach leverages cloud transformation to streamline IT carveouts, providing greater flexibility and cost savings while accelerating transaction timelines.
Divesting parts of a business often involves complex IT separations that can derail timelines and inflate budgets.
In fact, 47% of transactions fail to meet their deadlines because of IT-related issues, while 31% exceed their IT carve-out budgets.
The 3R Strategy
The 3Rs
of strategic migration:
KPMG conducts a comprehensive pre-deal infrastructure assessment to tailor the migration strategy based on the 3Rs principles.
Replatforming
entails shifting applications to the cloud with minimal changes, ensuring a smooth migration.
Rehosting entails migrating applications from end-of-life (EOL) hardware to cloud-based SaaS solutions.
Retaining
entails maintaining essential legacy hardware for business continuity, with plans to refactor or rebuild applications for the cloud in the long term.
KPMG-supported divestment project for one of the world’s largest petrochemical clients
Challenges
Complex, end-to-end separation project involving 3000 staff across 47 countries, carving out 5 legal entities including 70 manufacturing plants, and 119 business applications with a new ERP solution.
The project included managing the end-to-end separation process, in-deal separation advisory and execution services across all technology pillars (applications, infrastructure, networks, data, vendors and people).
Cloud transformation as a solution to common IT separation challenges
Migrated 3000+ workstations to Microsoft’s modern cloud technologies including O365, Intune and Azure AD in 10 weeks
14TB of unstructured data from multiple heterogeneous sources migrated to a single cloud service for 13 business units across globe
How it helped the client
Transferred responsibility for hosting, cyber security and end-user services to an external service provider
Substantially reduced the number of TSAs to be provided by internal IT
Significantly reduced TSA length
Avoided major investments in IT infrastructure for target
Transferred business over Day-1 with minimal impact on business
Minimum on-premise infrastructure
Optimize your IT carve-out with KPMG
Ensure your IT carve-out is efficient and cost-effective with KPMG’s minimum on-premise infrastructure approach.
Minimum on-premise infrastructure
KPMG’s minimum on-premise infrastructure approach applies cloud transformation principles to M&A transactions, reducing the time and effort required to establish an IT target operating model, while adding a great deal of flexibility to deals, which has not traditionally been associated with IT infrastructure.
A pre-deal infrastructure assessment can be done in both buy-side and sell-side scenarios to analyze as-is-infrastructure and estimate the minimum on-premise migration efforts. To achieve this, a preliminary analysis can be conducted to identify which services can be migrated to cloud-based solutions (as-a-service model) from the existing IT infrastructure (e.g., servers, switches, firewalls, laptops and desktops, databases). Based on this assessment, the sellers can then further
develop a migration strategy based on the 3Rs principles:
1. Retain: Any legacy, business-critical hardware that is required for business continuity in the longer run. It is recommended to either refactor or rebuild the application and make it cloud-ready
2. Rehost: All EOL/EOSL hardware that is currently hosting applications for which cloud-based SaaS versions are available
3. Replatform: Applications that can be migrated to cloud without major changes/effort
If you are interested in learning more about our minimum on-premise infrastructure approach and how it could be implemented for your transaction, feel free to contact us any time.
Contact
KPMG AG Wirtschaftsprüfungsgesellschaft
Marc Nöcker Partner Performance & Strategy, M +49 151 65237333 mnoecker@kpmg.com
www.kpmg.de www.kpmg.de/socialmedia
Matthias Till Partner Performance & Strategy, M +49 171 1808063 matthiastill@kpmg.com
