Inside a complex technology carve-out that became a successful stand-alone company

A global technology conglomerate decided to spin off its fast-growing software division into a separate, publicly listed company. The division had strong revenue growth and attractive margins, but it was deeply intertwined with the group’s shared services, infrastructure, and brand. The board wanted a clean separation within eighteen months to unlock shareholder value and give the software business more strategic freedom. To achieve this, the company engaged Radner’s team to provide end-to-end support in mergers, acquisitions, and restructuring processes, focusing on the design and execution of the carve-out.

The initial challenge was to define the perimeter of the new entity. The software division operated across multiple regions, with some teams fully dedicated and others partially shared with hardware and services units. Radner’s team worked with business leaders to map all activities, assets, and people that should be included in the spin-off. This mapping covered product lines, R&D projects, sales teams, support functions, and intellectual property. The result was a detailed perimeter definition that formed the basis for subsequent legal, financial, and operational workstreams.

With the perimeter defined, attention turned to the design of the target operating model for the stand-alone company. The software division had previously relied on the parent group for many functions, including finance, HR, IT infrastructure, and legal. Radner’s team facilitated workshops with future leadership to determine which capabilities needed to be built internally and which could be sourced externally. The target model emphasized agility, cloud-native infrastructure, and streamlined governance. It also defined the future organizational structure, including key roles, reporting lines, and decision rights.

One of the most complex aspects of the carve-out was the separation of shared IT systems. The division used the group’s global ERP, CRM, and identity management platforms, with data structures that mixed software and non-software activities. Radner’s team led a detailed analysis of system dependencies, data flows, and integration points. Based on this analysis, a separation strategy was developed, combining data migration, system cloning, and the introduction of new tools where necessary. The guiding principle was to ensure business continuity while creating a scalable, independent IT landscape for the new company.

Data migration required particular care. Customer records, contracts, billing histories, and product usage data had to be extracted from shared systems without compromising the integrity of the remaining group data. Radner’s team designed a robust data governance framework for the migration, including validation rules, reconciliation procedures, and security controls. Test migrations were conducted in sandbox environments to identify issues before the final cutover. This disciplined approach to data separation reduced the risk of errors that could have affected revenue recognition, customer support, or regulatory reporting.

Legal structuring was another critical workstream. The software division operated through a patchwork of legal entities, branches, and permanent establishments. Radner’s team worked closely with legal and tax advisors to design a new legal entity structure that balanced operational simplicity with tax efficiency. This involved transferring assets, contracts, and employees to newly created entities in key jurisdictions. Transitional service agreements were drafted to govern the continued provision of certain services by the parent group during a defined period after the spin-off.

Transitional service agreements, or TSAs, played a central role in managing the separation risk. The parent group would continue to provide selected services such as payroll processing, certain IT operations, and facility management for a limited time. Radner’s team helped define the scope, pricing, and service levels of these TSAs, ensuring that they were specific enough to avoid disputes but flexible enough to accommodate unforeseen needs. A clear exit plan was attached to each TSA, with milestones for building internal capabilities or transitioning to external providers.

From a financial perspective, the spin-off required the preparation of stand-alone financial statements and a credible equity story for investors. The software division’s historical financials were embedded in segment reporting, not in separate legal entities. Radner’s team supported finance in carving out historical P&L and balance sheet figures, allocating shared costs based on transparent, defensible methodologies. Pro forma financials were prepared to show how the business would have performed as an independent company. These figures underpinned the valuation discussions and the prospectus for the planned listing.

To support the equity story, Radner’s team worked with management to articulate the growth strategy of the new company. This included clarifying its positioning in the software market, defining key product and go-to-market priorities, and quantifying the addressable market. A detailed business plan was developed, with revenue projections by product line and region, as well as investment requirements in R&D and sales. The plan highlighted the benefits of independence, such as faster decision-making, focused capital allocation, and the ability to form new partnerships without group constraints.

Human resources considerations were particularly sensitive. Employees in the software division were proud of their products but uncertain about the implications of leaving the larger group. Radner’s team supported HR in designing a communication strategy that explained the rationale for the spin-off and the opportunities it created. New employment contracts and benefit schemes were prepared, ensuring that compensation remained competitive in the software talent market. Key employees were identified and offered retention packages to secure continuity through the transition.

Cultural aspects were also addressed proactively. The parent group had a more traditional, hardware-centric culture, while the software division aspired to a more agile, product-led environment. Radner’s team facilitated workshops to define the desired culture of the new company, focusing on customer-centricity, experimentation, and collaboration. Leadership behaviors were translated into concrete expectations, and internal communication campaigns reinforced these themes. This deliberate focus on cultural shaping helped differentiate the spin-off from its former parent in the eyes of both employees and customers.

Customer relationships represented another crucial dimension of the carve-out. Many enterprise clients had integrated contracts covering both hardware and software solutions. Radner’s team worked with sales and legal to review these contracts and determine how they should be split or amended. In some cases, tripartite agreements were created, with the parent group and the new company jointly serving the customer under clearly defined responsibilities. Communication plans were prepared to reassure customers that service quality and product roadmaps would be maintained or even improved after the spin-off.

As the separation date approached, execution risk increased. A detailed cutover plan was developed, covering IT changes, legal transfers, communication events, and operational handovers. Radner’s team coordinated rehearsals of critical steps, such as switching billing systems, updating bank accounts, and activating new support channels. A command center was established for the cutover weekend, with representatives from all key functions and escalation paths for decision-making. This structured approach to cutover management ensured that issues were identified and resolved quickly, minimizing disruption.

On the first trading day after the listing, the new software company debuted on the stock exchange with a valuation that exceeded initial analyst expectations. Investors responded positively to the clarity of the business model, the growth track record, and the stand-alone strategy. In the months following the spin-off, the company executed its plan to invest more aggressively in cloud-native products and to expand its partner ecosystem. Freed from internal competition for capital with hardware projects, it accelerated product releases and entered new markets more quickly.

The parent group also benefited from the transaction. By separating the software business, it simplified its portfolio and improved transparency for investors. The cash proceeds from the spin-off were used to strengthen the balance sheet and invest in core hardware and services activities. Operationally, the group continued to collaborate with the new company through commercial partnerships and joint offerings, but with clearer boundaries and incentives. The spin-off thus created value on both sides of the separation.

The success of this complex carve-out illustrates the importance of integrated support in mergers, acquisitions, and restructuring processes. Without a structured approach to perimeter definition, operating model design, IT and data separation, legal structuring, and stakeholder management, the risk of disruption would have been high. Instead, the transition was executed on time, within budget, and with limited operational issues. The new software company emerged as a focused, agile player with a compelling growth story, while the parent group gained strategic clarity.

In the technology sector, where business models and architectures are deeply interconnected, carve-outs are particularly challenging. This case shows that with disciplined planning, cross-functional coordination, and attention to both technical and human factors, even a highly entangled division can be transformed into a successful stand-alone entity. The structured support provided throughout the process turned a strategic intention into a tangible, market-recognized outcome.