The Financial Carve Out Process involves creating a Chart of Accounts, historical financial statements (Income Statements, Balance Sheets and Statement of Cash Flows) and current management reports for the divestiture candidate. This can be an arduous process due to the fact that many divestiture candidates have been a part of the parent entity for years, which means that the financial transactions associated with the divestiture candidate have not been allocated to the divestiture candidate during this time. In order to sell a divestiture candidate to another buyer, it is essential for the buyer to have access to audited financial statements so that the divestiture candidate can be effectively valued. Moreover, some buyers may need this information in order to satisfy financing requirements or debt covenants.
SPX has a team that is dedicated to rapidly building the Chart of Accounts, Financial Statements and Management reports of divestiture candidates from the ground up. This team also has methods to create justifiable allocations, giving potential buyers the insight that they need to make informed decisions related to pursuing the divestiture candidate.