Carve-out: Rebuilding the accounts, valuing and selling a non-core division

Rebuild a business unit's stand-alone accounts, value its EBITDA and sell it.

Introduction: rebuilding the accounts, the financial prerequisite of any carve-out

In a private equity market that turned selective again in 2026, listed groups and family-owned mid-caps alike are shedding their non-core activities to refocus their portfolios, while funds hunt for gems in the mid-market. These deals have a precise name: the carve-out, the sale of a division or an activity that has never existed as a stand-alone company. Yet a division has neither its own income statement, nor its own balance sheet, nor its own statement of cash flows: these financial statements simply do not exist and must be rebuilt from scratch. This rebuilding of the accounts, known as carve-out financial statements, drives the credibility of the price. According to the practice consolidated by the major firms, the rebuilt accounts must reflect the full cost of the activity, including those borne by the parent company on its behalf.

“A carve-out is not negotiated on the group's accounts, but on the accounts the activity would have produced had it always been autonomous.”, stand-alone rebuilding principle.

Three forces converge in 2026 to place this exercise front and centre: the pressure to exit a record stock of long-held holdings, the heightened demand from buyers for a defensible normalised EBITDA, and the operational complexity of separating an activity woven into a larger whole. This article, designed as a reference guide, walks through the full financial roadmap of a carve-out mandate: rebuilding the income statement, the balance sheet and the cash flow statement, then valuation, price mechanisms, taxation and finally the sale, without forgetting the transition services agreement that bridges the two worlds.

Secure the value of your carve-out before putting it up for sale

Before opening a dataroom or approaching a single buyer, the value of an activity to be detached is built in its rebuilt accounts. Book a first 30-minute call with Hectelion to frame the perimeter, the rebuilding of the financial statements and the valuation range of your separation project. Our team works across the whole chain, from preparing the stand-alone accounts to running the sale process, with dual French and Swiss expertise and complete economic independence from traditional financial intermediaries.

Acontos: estimate your company's value online for free

Before engaging a carve-out mandate, it is useful to have a first estimate of value. Acontos is Hectelion's online tool that combines audit, due diligence and business valuation: it analyses your accounts, normalises EBITDA and applies market multiples to produce a documented valuation range. Powered by Anthropic's Claude Sonnet 5 artificial intelligence and calibrated by our valuers, the Acontos simulator gives you an order of magnitude in a few minutes, free of charge and without storing your documents. A useful starting point before rebuilding the accounts of an activity to be sold.

Definition: what is a carve-out?

A carve-out is the sale of part of a larger economic whole: a division, a business line, a product range, an operating subsidiary or a site, detached from its parent group to be sold to a third party, whether industrial or financial. The English term, literally “to cut out”, captures the central difficulty: the activity sold has never operated independently. It shared with the rest of the group its support functions (general management, finance, human resources, information systems, procurement), common assets, pooled contracts and sometimes a single treasury. Unlike the sale of an already-autonomous company, whose annual accounts exist and are audited, the carve-out requires rebuilding the financial picture of the activity as if it had always been a company in its own right.

Legally, the carve-out is most often carried out through a partial asset contribution or a prior demerger creating a dedicated legal entity, followed by the sale of that entity's shares. Under Swiss law, the demerger and transfer of assets are governed by the Merger Act (LFus). Financially, however, the challenge is identical in both countries: producing reliable stand-alone accounts, the only basis able to support a credible valuation and a solid negotiation.

Carve-out, spin-off, demerger or straight sale: naming the deal correctly

The word carve-out covers several realities that must be distinguished in order to choose the right route. The carve-out by sale, the most common among SMEs and mid-caps, consists of detaching an activity and then selling it to a buyer, whether industrial or a fund: it is a trade sale preceded by a separation. The equity carve-out refers to floating a fraction of the detached activity's capital on the stock exchange, with the group keeping control: this route, reserved for large listed companies, falls outside Hectelion's scope, as we are not FINMA-authorised and do not act on listed transactions. The spin-off, or demerger by distribution, allocates the shares of the detached activity directly to the group's shareholders, without a sale or any price received.

These routes also differ from a straight company sale and from an asset deal. Selling an already-autonomous company requires no rebuilding: its accounts exist and are audited. Selling a business as a going concern transfers isolated assets, not a constituted entity. The carve-out sits between the two: it creates an entity out of a larger whole, which is why rebuilding the accounts is at the heart of this article. Legally, it most often uses the partial asset contribution or the demerger in France, and the transfer of assets or the demerger governed by the Merger Act in Switzerland. Naming the deal correctly from the outset shapes all the legal, tax and financial structuring that follows.

Origins: from strategic refocusing to portfolio discipline

The practice of the carve-out was born from the active management of business portfolios by large groups. From the 1980s onwards, the theory of refocusing on the core business pushed conglomerates to divest peripheral activities judged to create little value. The logic then sharpened: a group sells a division not because it is doing badly, but because it is worth more in the hands of a buyer for whom it is strategic, or because the capital tied up would be better deployed elsewhere. Consulting firms have formalised this discipline around a simple idea: roughly two thirds of large acquisitions are followed, on average within seventeen months, by a divestment of assets judged non-essential.

This deep trend now reaches French and Swiss SMEs and mid-caps. A family business may wish to part with a secondary activity to fund its growth, prepare a succession or reduce its debt. A group under a leveraged buy-out may sell a division to deleverage before an exit. An investment fund, finally, may buy a carve-out division to turn it into a stand-alone growth platform. In every case, the financial question is the same: how much is this activity worth once unplugged from its group, with its own costs and its own capital?

Why rebuilding the accounts is the heart of a carve-out

Rebuilding the accounts is not an accounting formality ahead of the sale: it is the exercise that determines value itself. First, without stand-alone accounts, it is impossible to isolate the revenue genuinely attributable to the activity, the margin it generates and its autonomous EBITDA, which serves as the basis for any valuation by multiples. Second, rebuilding reveals the costs the group bore for the activity and that the buyer will now have to shoulder alone: these stand-alone costs often turn a seemingly comfortable EBITDA into more modest profitability.

Third, it brings to light the working capital specific to the perimeter, hence the cash the buyer will have to fund from day one. Fourth, it allows a clean separation of the debt and the assets that follow the activity from those that stay with the group, a split that bears directly on the net financial debt deducted from the price. Fifth, it forms the documentary bedrock of the vendor due diligence: a savvy buyer will only credit a business plan if the rebuilt historical accounts are robust and traceable. In short, the quality of the rebuilding drives at once the headline price, its defence in negotiation and the speed of execution of the sale.

The roadmap of a carve-out mandate: the stages of a separation project

A carve-out mandate is run like a structured project, from a financial standpoint above all. The first stage is framing the perimeter: defining precisely what is sold and what stays, meaning the contracts, the assets, the employees, the inventory and the commitments attached to the activity. This perimeter, set out in a delineation document, is the reference for all the rebuilding that follows. A blurred perimeter produces contestable accounts and weakens the price.

The second stage is data collection and extraction: from the group's cost accounting, the income and expenses directly attributable to the activity are isolated, then the shared items are dealt with. The third stage is the rebuilding proper of the three financial statements, income statement, balance sheet and cash flow statement, over at least three historical years. The fourth stage is normalisation: exceptional items, intragroup transactions on non-market terms and arbitrary allocations are restated to derive a normalised, stand-alone EBITDA.

The fifth stage is building the stand-alone business plan, which incorporates stand-alone costs, dedicated capital expenditure and any dis-synergies. The sixth stage is valuation, by multiples and by discounted cash flows. The seventh stage is preparation for the sale: vendor due diligence, documentation, definition of the transition services agreement and of the operational separation plan. The eighth and final stage is running the sale process itself, through to closing and effective separation. Each of these stages is financial before it is legal, and it is the rigour of the rebuilding that gives them their strength.

Rebuilding the carve-out income statement: from revenue to stand-alone EBITDA

The rebuilt income statement starts from the revenue attributable to the activity sold. This apparently simple point demands rigour: intragroup sales that will disappear after the sale must be removed, or valued at market price if they continue under contract. Gross margin is then rebuilt by charging direct costs, raw materials, production costs, logistics costs, without major difficulty where cost accounting is granular.

The real complexity lies in shared costs. A division uses the group's support functions: management, accounting, payroll, IT, legal, procurement, communication. In the group's accounts, these costs are allocated, sometimes on a lump-sum basis, sometimes pro rata to revenue. Yet this allocation almost never reflects the actual cost the activity would bear alone. Rebuilding the income statement therefore requires two successive moves: removing the group allocation, then reincorporating the real stand-alone cost of the functions the buyer will have to recreate or buy in. The difference between the two constitutes the dis-synergy, positive or negative depending on the case. A small division backed by a large group often benefits from economies of scale it will lose once autonomous, which weighs on its stand-alone costs.

This leads to the carve-out EBITDA, the central metric: the operating result before depreciation the activity would generate on a stand-alone basis. It must be normalised for exceptional items and presented with a clear bridge from the group's reported EBITDA. The resulting EBITDA margin, compared with sector benchmarks, is the first indicator the buyer will look at. A carve-out EBITDA presented without honestly reincorporating the stand-alone costs is the classic trap that makes a negotiation collapse in due diligence.

Rebuilding the carve-out balance sheet: assets, liabilities and working capital of the perimeter

The rebuilt balance sheet splits the group's assets and liabilities between what follows the activity and what stays. Within fixed assets, the dedicated tangible assets are allocated, machinery, plant, possibly operating real estate, along with the intangibles attached to the activity, brands, patents, software. The split of pooled assets, a shared site for example, must be explicitly settled. To these items is added the question of historical goodwill, which is generally not transferred as is but rebuilt upon acquisition by the buyer through a purchase price allocation.

The heart of the carve-out balance sheet is operating working capital, because it determines the cash the buyer will have to tie up from the moment of takeover. It is rebuilt item by item. The trade receivables attributable to the activity represent the money customers still owe; those in the perimeter must be isolated and their recoverability checked. The inventory specific to the activity, raw materials, work in progress and finished goods, is valued and attached. Trade payables, conversely, represent the amounts the activity owes its suppliers and reduce the requirement. Working capital is thus calculated as the sum of trade receivables and inventory, less trade payables, to which other operating receivables and payables are added.

This working capital must be expressed at a normative level, that is average and stripped of seasonal or year-end effects, because it is this normative level that will serve as the reference for the price adjustment at closing. Finally comes the split of financial debt and debt-like items: the debt dedicated to the activity, lease commitments, provisions and other debt-like items that will reduce equity value are identified. The balance, assets less allocated liabilities, constitutes the pro forma equity of the perimeter.

Rebuilding the carve-out statement of cash flows

The rebuilt statement of cash flows, generally drawn up under the indirect method, shows how the activity generates and consumes cash on a stand-alone basis. It starts from the carve-out EBITDA, deducts the change in working capital, the dedicated capital expenditure and the stand-alone tax, to arrive at free cash flow. It is the most revealing statement for a buyer, because it translates the activity's real ability to self-finance once separated.

Rebuilding the cash flows highlights two points often underestimated. On one hand, a growing activity consumes working capital: the cash generated by operations is partly absorbed by the rise in trade receivables and inventory, which reduces free cash flow. On the other hand, a division sometimes benefited, within the group, from a centralised treasury that masked its own financing needs; once unplugged, it must fund its operating cycle from its own equity or a dedicated credit line. The stand-alone cash flow statement makes visible the separation investments, those one-off outlays needed to make the activity autonomous, its own information systems, premises, equipment, which weigh on the first post-sale years. A credible cash flow statement is what then allows a defensible discounted cash flow valuation to be built.

Do the rebuilt accounts need auditing? Combined financials, pro forma and level of assurance

Not all rebuilt accounts are equal in credibility, and the level of assurance expected depends on the nature of the deal. For a private sale to a single buyer, combined financial statements and unaudited pro forma information are generally produced, presented within a vendor due diligence conducted by an independent third party. This level, known as limited assurance, is sufficient in most French and Swiss mid-market transactions, provided the allocations and restatements are traceable, documented and reconciled with the group's accounts.

For a stock market listing or a sale to a listed buyer, by contrast, the carve-out accounts must be audited to demanding standards: these are carve-out financial statements in the strict sense, prepared in line with the principles detailed by the major audit firms and, where applicable, with market regulators' requirements on pro forma information. The accounting framework chosen matters just as much, whether IFRS, the French framework of the Autorité des normes comptables or Swiss GAAP FER in Switzerland. The choice of assurance level is a trade-off between the cost and depth of preparation on one side, and the confidence the accounts inspire in the buyer on the other. The more sophisticated the buyer and the higher the price at stake, the more robust, even formally audited, rebuilt accounts they will require.

The transition services agreement (TSA) and stand-alone costs

Between the sale and full autonomy, there is a transition period during which the seller keeps providing certain services to the activity sold: payroll, IT, accounting, logistics, procurement. This continuity is organised by a transition services agreement, or TSA, which sets out the services, their duration, generally six to twenty-four months, and their pricing. The TSA secures operational continuity and prevents the activity from being paralysed the day after closing.

Financially, the TSA has a double effect that must be modelled with care. On one side, it charges the seller or the buyer for services that affect both parties' income statement during the transition. On the other, it merely defers the question of stand-alone costs: on expiry of the TSA, the activity will have to assume alone functions it subcontracted to the group, at a cost that may be higher. An honest rebuilding of the accounts therefore incorporates not the cost of the TSA, temporary and often advantageous, but the target stand-alone cost the activity will bear once fully autonomous. It is this target cost, and not the transitional one, that must be retained in the normative EBITDA used as the basis for valuation. Underestimating this point leads to overvaluing the activity and to creating a disappointment that will be paid for during negotiation or in the price adjustment.

Stranded costs: what stays with the seller

Rebuilding the accounts focuses on the activity sold, but a carve-out produces a mirror effect, often overlooked, on what the seller keeps. When a division leaves, part of the costs it absorbed does not disappear: the head office stays sized for a larger group, the pooled IT and supplier contracts keep their volume, some support functions become underused. These costs that remain with the seller with no activity to bear them are the stranded costs.

Their stakes are twofold. First, they degrade the profitability of what the group keeps: the share of head-office costs the divested division bore falls back on the retained activities and weighs on their EBITDA. Second, they reduce the net benefit of the deal: an attractive sale price may be partly absorbed by stranded costs if the seller does not tackle them quickly. A well-run carve-out therefore comes with a stranded-cost reduction plan on the seller's side, calibrated on the duration of the transition services agreement, during which part of these costs remains recharged to the buyer. Ignoring stranded costs leads to overestimating the real gain of the sale for the selling group. It is an angle that rebuilding the activity's accounts alone does not reveal, and that must be analysed in parallel, from the seller's standpoint.

Valuing a carve-out: from adjusted EBITDA to equity value

Valuing a carve-out rests on the same methods as a classic valuation, but applied to the rebuilt accounts. The first approach is that of transaction multiples and trading multiples: a sector multiple observed on comparable deals is applied to the normalised carve-out EBITDA to obtain an enterprise value. The second approach is that of discounted cash flows, which discounts the stand-alone business plan at a cost of capital reflecting the risk of the autonomous activity. The two methods overlap and cross-check each other.

The move from enterprise value to equity value is the decisive moment of a carve-out. The net financial debt allocated to the perimeter and the debt-like items are deducted from enterprise value, then an adjustment is made for working capital relative to its normative level. The quality of the debt and working-capital split achieved when rebuilding the balance sheet therefore feeds through directly, franc for franc, to the price paid to the seller. A carve-out often warrants a specific discount relative to an already-autonomous company: a complexity discount linked to the separation, to dis-synergies and to execution risk, which the buyer builds into their multiple. Conversely, a strategic buyer for whom the activity generates synergies may pay a premium. Hectelion is not FINMA-authorised and does not act on transactions involving listed companies; on carve-outs of unlisted companies, our multi-method valuation is aligned with IVSC standards and market practice.

Locked box or completion accounts: setting the price of a carve-out

Once equity value has been estimated, the price mechanism that will translate it into the contract still has to be chosen. Two approaches compete, and the choice is particularly sensitive in a carve-out. The completion accounts mechanism sets the final price on the basis of accounts drawn up at the closing date: actual net debt and working capital are measured there, then adjusted relative to their normative level. In a carve-out, where these figures are rebuilt and not drawn from pre-existing audited accounts, this approach brings precision but fuels technical discussions on the exact scope of each item.

The locked box mechanism, by contrast, fixes the price on the basis of a reference balance sheet at a date prior to closing, with the seller guaranteeing the absence of value leakage between that date and completion. It brings certainty to the seller but assumes solid reference accounts, which, in a carve-out, points straight back to the quality of the rebuilding. The choice between locked box and completion accounts therefore depends on the robustness of the rebuilt accounts: the more the normative working capital and the allocated net debt are documented, the more the locked box becomes practicable and reassuring for both parties.

Selling a carve-out: perimeter, separation and closing

Once the accounts are rebuilt and the valuation established, the sale follows a structured process, but enriched with the specifics of the carve-out. The vendor due diligence bears on the rebuilt stand-alone accounts and not on the group's accounts: it must convince the buyer of the soundness of the allocations and the reality of the autonomous EBITDA. The information memorandum presents the exact perimeter, the separation plan and the draft TSA. The negotiation of the sale contract includes clauses specific to the carve-out: precise definition of the transferred perimeter, price adjustment mechanism on working capital and net debt at closing, specific warranties on the separated assets, and TSA terms.

Operational separation is the workstream running in parallel with the transaction. It consists of physically unplugging the activity from the group's systems: IT migration, transfer of supplier and customer contracts, reassignment of employees, creation of local legal entities. This workstream, often the longest, determines the real success of the deal beyond signing. Closing takes place once the conditions precedent, regulatory approvals, the buyer's financing, completion of the prior demerger, are satisfied. After closing, the TSA takes over to ensure continuity until full autonomy. On the differences between jurisdictions, the structuring differs between France and Switzerland, both for the prior demerger and for the taxation of the deal.

Carve-out taxation: favourable regimes in France and neutrality in Switzerland

Taxation can make or break the appeal of a carve-out, and its structuring must be thought through from the perimeter-framing stage. In France, detaching an activity through a partial asset contribution in principle triggers taxation of capital gains on the contributed items. But where the contribution relates to a complete and autonomous business branch, it may benefit from the favourable merger regime provided by articles 210 A and 210 B of the General Tax Code, which defers taxation of the capital gains, subject in particular to a commitment to retain the shares received. This same regime brings registration duties down to a fixed duty rather than a proportional one. Furthermore, the transfer of a total or partial universality of assets between taxable persons benefits from a VAT exemption under article 257 bis of the General Tax Code, which avoids mobilising VAT cash on the deal.

In Switzerland, the demerger and transfer of assets governed by the Merger Act may be carried out on a tax-neutral basis, without taxation of hidden reserves, where the conditions of article 61 of the Federal Act on Direct Federal Taxation are met: continued tax liability in Switzerland and carrying over the items at their last value determining for profit tax. For a demerger, the entities resulting from the deal must continue a business or a distinct part of a business. A five-year blocking period applies in the event of a transfer to a subsidiary: selling the participation rights during that period triggers a tax reassessment. In both countries, the qualification as a complete branch or distinct business, the sequencing of the prior demerger and the sale, and compliance with the retention commitments are decisive. Hectelion is not a law firm and works in coordination with the client's tax advisers, but the tax dimension must be built into the rebuilding of the accounts from the start, because it influences both the structuring and the net price received by the seller.

When to launch a carve-out

The moment to launch a carve-out is chosen at the crossroads of strategy and market. Strategically, a group starts a separation when an activity no longer belongs to its core business, when it ties up capital that would be better deployed elsewhere, or when a natural buyer emerges for whom the activity is worth more. The succession of a family business, a generational change or a shift in the model are all frequent triggers among French and Swiss SMEs and mid-caps.

On the market side, the window matters. In 2026, the high stock of long-held holdings creates exit pressure that multiplies divestments, while buyers, more selective, place a higher value on files whose rebuilt accounts are beyond reproach. The best time to launch a carve-out is therefore when there is the time needed to properly rebuild the accounts and prepare the separation, generally six to twelve months before going to market. A rushed carve-out, whose stand-alone accounts are not stabilised, is paid for with a discount or with the failure of the process.

Who to call on to run a carve-out

A successful carve-out rests on three complementary skill sets. The first is financial: rebuilding the accounts, normalising EBITDA, splitting the debt and working capital, building the stand-alone business plan and valuing the activity. The second is transactional: structuring the deal, preparing the vendor due diligence, running the sale process and negotiating the contract. The third is operational: steering the concrete separation and the TSA. These skills must be coordinated by an independent adviser who keeps the overall view and defends the seller's interest.

Hectelion supports directors and shareholders on the first two, financial and transactional, with dual French and Swiss expertise and economic independence from banks and financial intermediaries. Our firm acts on transactions from 2 to 500 MCHF, from framing the perimeter to running the sale, drawing on a multi-method valuation methodology aligned with IVSC standards. We have notably run carve-out valuation and sale mandates in the construction sector, where rebuilding the accounts and defining the perimeter were decisive for the price obtained.

Benefits: refocusing, value and speed of execution

The carve-out offers powerful benefits when well prepared. First, it enables strategic refocusing: the group frees itself of a peripheral activity and concentrates its capital and attention on its core business. Second, it creates value through revelation: an activity buried in a larger whole is often undervalued; sold to a buyer for whom it is strategic, it can reach a price above its accounting contribution to the group. Third, it brings financial flexibility: the sale proceeds deleverage the group, fund its growth or reward shareholders.

For the buyer, the benefits are symmetrical: they access a targeted activity, without taking on the whole group, with the possibility of generating synergies if they already operate in the sector. A rigorous rebuilding of the accounts also speeds up execution: a file whose stand-alone EBITDA, normative working capital and debt split are clear and documented is negotiated faster and closes with less friction. The quality of the financial preparation is, here again, the first driver of speed and security.

Limits: complexity, dis-synergies and separation costs

The carve-out also carries real limits that must be faced squarely. The first is complexity: rebuilding reliable stand-alone accounts demands time, granular cost accounting and sometimes delicate judgement calls on the allocations. A poorly defined perimeter or fragile accounts expose the deal to a challenge in due diligence and to a downward price revision. The second limit is dis-synergies: a separated activity loses the group's economies of scale and bears higher stand-alone costs, which reduces its autonomous EBITDA relative to its apparent contribution.

The third limit lies in separation costs, often underestimated: systems migration, the duplication of support functions and one-off investments weigh on the first years. The fourth is execution risk: operational separation may prove longer and costlier than expected, and a poorly calibrated TSA may become a source of dispute. Finally, the valuation of a carve-out frequently incorporates a complexity discount relative to an already-autonomous company. These limits do not condemn the deal, but they impose rigorous financial preparation and unfailing honesty in rebuilding the accounts, failing which disappointment materialises at the worst moment, in the middle of negotiation.

The 5 mistakes to avoid

Mistake 1: presenting the group's EBITDA instead of the stand-alone EBITDA

The most frequent mistake is to sell the activity on the basis of its contribution to the group's EBITDA, without reincorporating the stand-alone costs of the support functions it will have to recreate. The buyer, in due diligence, rebuilds these costs and discovers a lower autonomous EBITDA, which triggers a price revision or a breakdown in discussions. A honest carve-out EBITDA must be presented from the outset, with a clear bridge from the group's accounts.

Mistake 2: underestimating dis-synergies and separation costs

Confusing the transitional TSA cost, temporary and often advantageous, with the target stand-alone cost leads to overvaluing the activity. Likewise, forgetting the one-off separation investments distorts the cash flow statement. The rebuilding must retain the target cost the activity will bear once fully autonomous, and not the subsidised cost of the transition period.

Mistake 3: poorly defining the transferred perimeter

A blurred perimeter, where it is not precisely known which contracts, assets, employees and inventory follow the activity, produces contestable accounts and fuels post-closing disputes. The perimeter delineation document must be established before rebuilding the accounts and serve as the single reference for the whole deal.

Mistake 4: neglecting normative working capital

Delivering an activity with working capital below its normative level forces the buyer to inject cash from takeover: they will deduct it from the price. Conversely, a seller who does not define a normative level exposes themselves to an unfavourable adjustment at closing. Normative working capital must be calculated, documented and negotiated upfront.

Mistake 5: rebuilding the accounts too late

Launching the rebuilding once the sale process is already under way leads to improvising under pressure, with fragile accounts and timelines that weaken the seller's position. Rebuilding the accounts must precede going to market by several months, to allow time for the vendor due diligence and for the figures to stabilise.

Case 1: carve-out of a French industrial division valued at 30 M EUR

A French industrial group decides to sell a non-core division in order to refocus its resources on its core business. The division generates attributable revenue of 40 M EUR. In the group's accounts, its contribution to EBITDA comes out at 6.0 M EUR, but this figure includes a head-office cost allocation of 2.0 M EUR that does not reflect the real cost of the support functions. The rebuilding removes this allocation, then reincorporates the real stand-alone cost of the functions to recreate, management, finance, information systems, human resources, estimated at 3.0 M EUR. The net dis-synergy therefore amounts to 1.0 M EUR, and the normalised carve-out EBITDA stands at 5.0 M EUR, a margin of 12.5%.

Rebuilding the balance sheet isolates the trade receivables of the perimeter at 8.0 M EUR, inventory at 4.0 M EUR and trade payables at 5.0 M EUR, giving working capital of 7.0 M EUR at a normative level, representing 17.5% of revenue. Applying to the carve-out EBITDA of 5.0 M EUR a sector multiple of 7.0 times, enterprise value comes out at 35.0 M EUR. After deducting the net financial debt allocated to the perimeter, at 5.0 M EUR, equity value stands at 30.0 M EUR. The deal is structured through a partial asset contribution creating a dedicated company, followed by the sale of its shares, accompanied by a twelve-month transition services agreement for IT and payroll.

Case 2: carve-out of a Swiss services activity sold for 20 MCHF

A Swiss company chooses to part with a services activity that has become peripheral, to sell it to a fund specialised in the mid-market. The activity generates revenue of 15 MCHF. Its contribution to the group's EBITDA comes out at 3.0 MCHF. Not capital-intensive, the activity has limited shared costs, but the rebuilding identifies a dis-synergy of 0.5 MCHF linked to the support functions it will have to internalise once autonomous. The normalised carve-out EBITDA thus stands at 2.5 MCHF, a margin of 16.7%.

The rebuilt working capital comprises trade receivables of 2.5 MCHF and trade payables of 1.0 MCHF, giving normative working capital of 1.5 MCHF, representing 10% of revenue. Applying to the carve-out EBITDA of 2.5 MCHF a multiple of 8.0 times, consistent with the multiples observed on recurring services activities, enterprise value comes out at 20.0 MCHF. With the activity carrying no debt, the allocated net financial debt is close to zero and equity value is around 20.0 MCHF. The sale, structured under Swiss law via a transfer of assets governed by the Merger Act, comes with an eighteen-month transition services agreement covering information systems and payroll management, invoiced by the seller until full autonomy.

A word from the CEO

“A carve-out is first of all an exercise in accounting truth. Until the activity's accounts have been rebuilt as if it had always been autonomous, its true value is unknown, and one negotiates blind.”

“The difficulty is never finding a buyer, but presenting them with a defensible stand-alone EBITDA, a clear normative working capital and an undisputed debt split. It is this rebuilding work, done upstream, that protects the price and speeds up the transaction.”

“Our role is to rebuild that financial picture with rigour and honesty, then run the sale end to end. A well-prepared carve-out is not an amputation, it is the revelation of the value of an activity the market did not see.”

Aristide Ruot, Ph.D., Founder and Chief Executive Officer, Hectelion SA

FAQ: the 10 essential questions on carve-outs

Introduction: what to keep in mind before the questions

The carve-out concentrates the difficulties of valuation and of the transaction into a single exercise. The recurring questions from directors bear on rebuilding the accounts, valuation and the mechanics of the sale. Here are the ten essential answers.

Q1: What exactly is a carve-out?

It is the sale of part of a group, a division, branch or operating subsidiary, which has never functioned on a stand-alone basis and whose financial statements must be rebuilt before being sold to a third party.

Q2: Why must the accounts of a carve-out be rebuilt?

Because the activity sold does not have its own income statement, balance sheet and cash flow statement. These stand-alone statements must be rebuilt to isolate the autonomous EBITDA, the working capital and the debt, the only items that allow a credible valuation.

Q3: What is the stand-alone EBITDA of a carve-out?

It is the operating result before depreciation the activity would generate on a stand-alone basis, after removing the group's cost allocations and reincorporating the real cost of the support functions it will have to assume alone. It often differs markedly from the apparent contribution to the group's EBITDA.

Q4: What are dis-synergies in a carve-out?

They are the extra costs an activity bears once separated from the group, for want of its economies of scale. They weigh on the stand-alone EBITDA and must be estimated honestly, on pain of overvaluing the activity.

Q5: How is working capital rebuilt?

By isolating the trade receivables, inventory and trade payables specific to the perimeter, then expressing the result at a normative level, average and corrected for seasonality. This normative working capital serves as the reference for the price adjustment at closing.

Q6: How is a carve-out valued?

A sector multiple is applied to the normalised carve-out EBITDA, cross-checked by a discounting of the stand-alone business plan's cash flows. The allocated net debt is then deducted to obtain equity value, with a possible complexity discount.

Q7: What is a transition services agreement (TSA)?

It is the agreement by which the seller keeps providing certain services to the activity sold, IT, payroll, accounting, over a transition period, generally six to twenty-four months, until the buyer makes the activity fully autonomous.

Q8: What is the difference between a carve-out and the sale of a company?

The sale of a company relates to an already-autonomous entity, with existing audited accounts. The carve-out requires legally creating an entity and rebuilding its accounts, which adds a layer of financial and operational complexity.

Q9: How long does a carve-out take?

Rebuilding the accounts and preparation generally take six to twelve months before going to market, to which are added the duration of the sale process and then of the operational separation, often extended by the TSA.

Q10: Is a carve-out handled differently in France and in Switzerland?

The financial logic is identical, but the legal and tax structuring differs. The prior demerger and the taxation follow distinct rules, the partial asset contribution in France, the transfer of assets governed by the Merger Act in Switzerland.

Estimate your company's value with Acontos, Hectelion's online simulator

To put a value on an activity before launching its rebuilding, Acontos offers a first online valuation, free and immediate. The tool brings three trades together in one, audit, due diligence and business valuation: it reads your accounts, normalises EBITDA and applies market multiples to produce a reasoned valuation range, together with a reading from the buyer's standpoint. The method draws on Anthropic's Claude Sonnet 5 artificial intelligence, framed by our valuers' methodology. Your documents are never stored and are never used for any training. To go further, discover Acontos and then request a rebuilding and sale mandate from our teams.

Conclusion: the carve-out, an exercise in financial reconstruction before it is a sale

Selling a division or a non-core activity does not come down to finding a buyer: it is first of all a work of financial reconstruction. Until the income statement, the balance sheet and the cash flow statement of the activity have been rebuilt as if it had always been autonomous, one knows neither its stand-alone EBITDA, nor its working capital, nor its own debt, hence neither its value. The quality of this rebuilding determines the price, its defence in negotiation and the speed of execution. In 2026, in a market where groups shed their non-essential assets and where buyers demand beyond-reproach accounts, this rigour makes the difference between a successful sale and a disappointment. A well-prepared carve-out reveals the value of an activity the market did not see.

Article summary

The carve-out is the sale of a division or an activity that has never existed as a stand-alone company. Its central financial challenge is rebuilding the stand-alone accounts: the income statement, from revenue to autonomous EBITDA via the restatement of shared costs and dis-synergies; the balance sheet, with the split of assets, trade receivables, trade payables, normative working capital and net debt; and the statement of cash flows, which reveals the real self-financing capacity of the perimeter.

The roadmap of a mandate follows eight stages, from framing the perimeter to running the sale, via rebuilding, normalisation, the stand-alone business plan, valuation and preparation for the sale. The transition services agreement ensures continuity between the sale and autonomy, without masking the target stand-alone cost that must be retained in the normative EBITDA. Valuation applies multiples and discounted cash flows to the rebuilt accounts, then deducts the allocated net debt to arrive at equity value. Tax structuring, under a favourable regime in France or on a neutral basis under article 61 LIFD in Switzerland, and the stranded costs left with the seller complete the analysis.

The two cases illustrate the mechanics: a French industrial division whose normalised carve-out EBITDA of 5.0 M EUR, after reincorporating the stand-alone costs, leads to an equity value of 30.0 M EUR; a Swiss services activity valued at 20.0 MCHF on an EBITDA of 2.5 MCHF. In both cases, the honest rebuilding of the accounts is the bedrock of the price. Hectelion supports these deals, from framing to sale, with dual French and Swiss expertise and complete economic independence.