Business Transfer, Carve-Out: How to Ensure a Successful Transition? by Jean-Michel Demangeat

1. Mr. Demangeat, what are the main objectives of AXCEL Partners’ assignments in the context of business transfers or carve-out operations?

A business transfer or carve-out is always a critical issue for shareholders, executives, and employees involved. These operations take place in various contexts: they may result from a large corporation reviewing its assets and deciding to divest a non-strategic asset or an underperforming subsidiary, the closure of a factory, or a shareholder-executive wishing to withdraw from a financially sound asset—or, conversely, from a company in crisis.

These are always complex and time-consuming operations that require expertise, in-depth knowledge of the process and stakeholders, as well as specific soft skills from our interim managers.

In all cases, it is crucial to seek support as early as possible, both in the preparation and execution phases, when considering such an operation.

2. What levers do you implement to enhance a company’s value before a sale?

The primary goal is to make the sale feasible, meaning that for financially sound companies, it is about aligning the seller’s expected price with the buyer’s proposed price. To achieve this, it is essential to identify and address underperformance factors in each of the company’s operational processes, while also ensuring the retention of key talents.

For companies in difficulty, it is crucial not to confuse causes with effects. Cash flow problems, for example, are often just a symptom of deeper issues that the company has either failed to identify or refuses to acknowledge.

In all cases, anticipation is key. Overcoming barriers to change is often essential, as these obstacles may stem from habitual inertia, leadership denial, executive isolation, or a lack of team cohesion.

3. Can you share an example of a mission where you supported a company in the context of a business transfer?

Two examples come to mind:
The first involved a site closure project in the agri-food sector. I’d like to point out—especially in light of recent events—that the law requires companies planning site closures to seek alternative solutions before proceeding. We were commissioned to explore these alternatives and successfully identified a buyer. This prevented a costly redundancy plan (PSE), which would have had significant social and financial consequences. A large portion of the potential PSE costs was instead offset by the sale proceeds. Ultimately, it was a win-win operation for all parties involved—the seller, the buyer, and the employees.

The second case concerned a restaurant sector company that was facing financial difficulties at the time of its sale. The sudden departure of its CFO further complicated the situation. We deployed an expert interim manager who reorganized accounting, updated cost structures, and redefined procurement procedures. Within four months, while maintaining the same business volume, financial visibility was restored, securing the sale process and rebuilding investor confidence.

4. How do you intervene to manage human capital during these critical phases?

The golden rule is to involve management and all employees in both the decision-making and execution process. In a carve-out, for example, failing to retain key talent can jeopardize the entire deal—after all, even the best business model is worthless without the right people to run it.

I recall the case of a European manufacturer facing social unrest, which had delayed its sale. Our interim manager reestablished social dialogue while ensuring the retention of key talent. Three months later, the sale process was able to resume in a stabilized environment.

We also intervene to set up appropriate HR structures, ensure business continuity, and preserve the company’s human capital.

5. What are the key steps in your methodology to ensure a successful transition?

In this type of context, and especially in the case of distressed M&A, it is highly recommended to conduct an independent audit, such as an IBR (Independent Business Review), which will challenge the management teams, ensure that the diagnosis is shared, and confirm that the plan accompanying the sale is based on credible assumptions in terms of business and results.

We follow a three-step methodology. First, a quick diagnosis to identify quick wins that generate cash flow, levers for improving operational efficiency, and value-creation opportunities. Next, a shared action plan that defines clear objectives, the necessary resources, and the responsible parties. Finally, immediate execution, supported by our experienced managers, who are able to address complex issues quickly and mobilize teams around measurable results.

A word to conclude?

The current transformations in the French economy are structural and challenge the business models of many companies. A business transfer or carve-out is a complex project that requires support as early as possible.

We provide our clients with highly experienced managers in a very short time frame, capable of preparing and leading these transition operations, which are inherently challenging but critical for the company’s future success.

Les mutations actuelles de l’économie française sont d’ordre structurel et remettent en cause le modèle économique de nombreuses entreprises. Une opération de cession ou de carve out est un projet complexe qui nécessite d’être accompagné le plus en amont possible.

Nous mettons ainsi dans des délais très court à disposition de nos clients des managers très expérimentés capables de préparer et mener ces opérations qui sont par nature des opérations de transition.