One of the more common divestitures is the business unit spin-off into a separate new entity. Think IBM spinning off their professional services firm to Kyndryl or what Google may be forced to do with their Search unit.

In these scenarios, one business is being carved out into two. For the new business, there maybe some key personnel, but there will be some serious gaps based on what the parent company provided. Not just the email, finance, or HR side of things, but some internal tooling that handled the business processes that they grew accustomed (think expense reporting as one example).

Additionally, there will be the internal documentation the new company will no longer have access to. Tracking projects and change management. Lastly, if there are components that are owned by the spun off business like critical software, then you will also need to find a home for them.

Look at something like the size of Google Search. Imagine what it would take to pull it out just the product. You have not just algorithms implementing the search, but the crawlers that search the web and index it for the search engine, the databases that store the data and a way to tie in the users searching through the data to ensure it is relevant to them.

Then look at the parts that implement their common infrastructure. Will the new company retain the code and capabilities that Google has used for keeping the incredible uptime that they are known for: their custom hardware that they just replace whenever a component fails, the app management system that became the backbone of Kubernetes.

And that is before you realize that now you have to find and setup a new HR/Payroll system (and onboard it), a new financial/accounting system, new communication tools, etc.

If you are the parent company looking to divest, this is where the checklists come in handy of looking at what your enterprise components that power your business are, then drilling down to the common infrastructure bits that power the products that are being divested with the business, and using that to gauge what the transition will look like, and what a TSA may look like in the interim.

If you are a private equity firm that is purchasing the divested unit to situate it into its own company, then the common infrastructure bits (especially whether you need to setup a dedicated data center vs cloud offering) become even more important.

After all, if you are given a goose that lays golden eggs, you have to think about where it’ll live and how to feed it.

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