From Chaos to Confidence: Why Carve-Out Success Hinges on Embedded Execution

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Carve-outs are high-stakes, high-speed events. Every operating partner knows this. But while most firms focus heavily on due diligence and deal close, the true value creation—or erosion—happens in the messy, complex middle: the transition.

That’s where we live.

At In2Edge, we’ve spent years in the trenches of post-close transitions, embedded directly into carve-outs across industries. And here’s what we’ve learned: the difference between a struggling carve-out and a thriving portfolio company isn’t just leadership or capital. It’s execution infrastructure.

The Problem with the Traditional Model

In the typical carve-out scenario, there’s a flurry of activity to stand up a new business:

  • Contracts must be assigned or recreated
  • Privacy and compliance obligations must be documented and mapped
  • Procurement has to separate from shared systems and build a standalone vendor ecosystem
  • Business units are scrambling to meet TSA deadlines without breaking continuity

And yet, too often, this transition work is treated as administrative. It’s handed to internal teams already stretched thin—or worse, farmed out to law firms that are excellent at drafting, but not at driving outcomes.

This is where deals stumble.

Embedded Execution Is the Advantage

What we’ve seen firsthand is that carve-outs succeed when they treat transition not as a burden, but as a strategic accelerator.

When you embed specialized operators from day one—experts in contracts, legal operations, procurement frameworks, and privacy compliance—you don’t just check the boxes. You create a foundation for performance.

Here’s what that looks like in practice:

  • Customer and vendor contracts are triaged, transitioned, and streamlined with consistent clause positioning—reducing risk and renegotiation.
  • Procurement playbooks and “starter” policies are created for newly independent teams—so sourcing doesn’t grind to a halt.
  • Privacy compliance is embedded early with DPA and PIA protocols, often before the portfolio company even builds its legal team.
  • Executive teams receive clean reporting, simplified dashboards, and visibility across contract status and critical obligations.
  • And when applicable, AI-ready metadata is structured from the beginning—paving the way for smarter portfolio governance.

It’s not magic. It’s a repeatable process, born from working across carve-outs of all shapes and sizes.

The Proof Is in the Portfolio

We’ve now supported numerous carve-outs where the portfolio company is not only surviving—but thriving. Not one failure. Not one fire drill six months post-close. Just solid, functional businesses that are growing from a strong operational core.

When that pattern repeats across deals, it’s not luck. It’s structure.

Why Operating Partners Should Care

If you’re an operating partner looking across your pipeline, you might be asking:

  • How do we shorten the time to standalone?
  • How can we reduce the legal and operational noise so management can focus on growth?
  • How do we prepare for AI, audit, and exit readiness from day one?

The answer is embedded execution.

It’s faster, more cost-effective, and often far more scalable than internalizing every function or hiring Big Law to backfill what portfolio companies can’t yet do. It’s also why some firms are now standardizing this approach as part of their post-close playbook.

Looking Ahead: Beyond the Transition

What’s also exciting is that firms are now expanding beyond the carve-out phase, asking us to support:

  • Customer agreement reviews to enable faster GTM motions
  • Procurement 101 toolkits to mature sourcing at speed
  • Use cases for AI that go beyond buzzwords—think contract analysis, DPA flagging, and supplier trend detection

That’s the future of value creation. Transition is just the starting line.

Final Thought

If your firm is managing carve-outs—or planning for one—ask yourself this:

“Do we have an execution partner that brings structure, scale, and embedded accountability on Day 1?”

If the answer is no, the opportunity cost might be greater than you think.

At In2Edge, we’re not just building processes. We’re helping build successful companies.

Let’s talk.

Decision-Ready Boards, Growth Mindset, and the Fog of Change – with Tom Doorley

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When a merger or acquisition closes, the press releases go out, the champagne corks pop, and headlines highlight the deal’s potential. But as anyone in the business knows, the real work begins after the deal is done—in what Tom Doorley calls “Day Two.” That’s when integration, alignment, and value realization either come to life—or fall apart.

In my recent episode of M&A+ The Art After the Deal, I had the opportunity to speak with Tom Doorley, a veteran strategist and founder of Sage Partners. With a track record that spans startups, boardrooms, and a merger into Deloitte’s global strategy practice, Tom brings clarity to the often messy business of what it actually takes to make a deal work.

Here are the three most compelling and actionable lessons he shared for anyone operating in the post-deal landscape:

1. Make Your Board “Decision-Ready” – and Actually Use Them

One of Tom’s most powerful frameworks is the concept of a decision-ready board—a board of directors that is informed, engaged, and capable of contributing meaningfully to strategic direction, especially in the wake of a major transaction.

“Boards are expensive. If you’re not getting a return on that investment—beyond compliance—you’re doing it wrong.”

Tom challenges the traditional view of boards as periodic reviewers of quarterly results or governance watchdogs. Instead, he positions them as strategic assets that can offer foresight, pattern recognition, and post-deal calibration—if they’re given the tools and context to be effective.

What makes a board decision-ready?

  • They understand the deal rationale and strategic goals behind the transaction.
  • They receive real-time updates, not just retrospective reports.
  • They participate in post-deal evaluations—not to assign blame, but to learn and improve before the next transaction.

Professionals involved in post-deal strategy should consider: Are we leveraging our board’s insights early enough? Are they equipped to challenge us constructively and help us course-correct quickly?

2. Not All Growth Is Created Equal: Focus on Value-Creating Growth

We’ve all heard companies celebrate expansion, market share, or “growth at all costs.” But Tom makes a clear—and crucial—distinction: Growth isn’t valuable unless it’s aligned with your strategic core and creates durable enterprise value.

He shares a vivid contrast between two real-world cases:

  • Success story: Kimberly-Clark, through innovation and timely investment in new diaper technology, leapfrogged Procter & Gamble to dominate the premium category with its Huggies brand. This not only captured market share, but elevated the brand’s pricing power across adjacent product lines like Kleenex.
  • Misstep: Later, Kimberly-Clark acquired Scott Paper, a value-brand business that lacked the brand equity and innovation culture of its acquirer. The mismatch in market positioning and internal culture resulted in years of underperformance—an example of growth that diluted, rather than amplified, value.

“It’s not enough for an acquisition to be in the same category. If it doesn’t fit the way you create value, it will pull you off course.”

This lesson is especially relevant for private equity firms, corporate development teams, and operators who often assume category adjacency equals strategic fit. It doesn’t. Alignment across brand promise, innovation capabilities, and customer expectations is non-negotiable.

3. Plan for Day Two—Not Just Day One

Perhaps the most important insight from Tom’s experience is this: Too many companies obsess over the close and under-invest in what comes next. The celebration of Day One is often followed by the chaos of Day Two, when integration begins, questions mount, and execution lags.

“We put just as many resources on post-deal execution as on due diligence. Almost no one does that—but it makes all the difference.”

Tom shared that during his time at Deloitte, his team adopted a practice of starting post-merger integration planning before an LOI was even signed. That meant building early alignment on leadership roles, reporting structures, branding decisions, and operational priorities before any paperwork was finalized.

The impact? Fewer surprises, faster integration, and greater trust across both sides of the table.

He also highlights a critical operational challenge that’s often overlooked: contracts and vendor transition. In the fog of change, systems must still pay suppliers, legal obligations must be met, and customers must experience continuity. Teams that treat these “weeds” as afterthoughts often find themselves stuck in fire drills for months—eroding trust and burning value.

The professionals who succeed, Tom suggests, build repeatable integration playbooks that balance strategic vision with tactical precision.

Closing Thought: Value Is Forged in the Execution

Tom’s insights are a masterclass in post-deal leadership. From activating boards to avoiding vanity growth, and from strategic clarity to operational readiness, his message is clear:

Real value isn’t created at the negotiation table—it’s forged in the follow-through.

Whether you’re a dealmaker, operator, advisor, or board member, these principles will help you turn smart transactions into sustained success.

🔗 Want more? Listen to the full episode of M&A+ The Art After the Deal with Tom Doorley here. Visit www.In2Edge.com for more insights and post-M&A resources.

—

Lisa Scott Founder & CEO, In2Edge, Host of M&A+ The Art After the Deal and Author of M&A+: Fostering Trust, Removing Risk & Adding Value During the M&A Process.

🔍 About In2Edge

At In2Edge, we specialize in the art of execution after the deal. From contract transitions and procurement integration to legal operations and organizational readiness, we help private equity firms and corporate acquirers unlock real value post-transaction. Our experienced team works in the trenches—side by side with your internal teams—to make sure nothing falls through the cracks.

In2Edge: Hands-on. Execution-driven. Value-focused. Learn more at www.In2Edge.com or reach out to explore how we can support your next deal.

The $75 Million Oversight: The Imperative of Contract Due Diligence in M&A

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In the complex and high-stakes realm of mergers and acquisitions (M&A), the devil truly lies in the details—specifically, within the dense text of contracts. The tale of the Columbus acquisition serves as a stark reminder of this truth, where excitement and oversight led to a staggering $75 million loss, all due to neglected customer agreements with burdensome rebates and unfavorable pricing terms. This incident underscores a crucial lesson: comprehensive contract due diligence is not just beneficial; it’s essential.

The Columbus Deal: A Cautionary Tale

The oversight of Columbus customer agreements—laden with costly rebates and restrictive pricing—was a critical error. These terms, overlooked during the deal negotiation phase, became painfully apparent post-acquisition, locking the new owners into financially detrimental agreements with no easy exits. This scenario, while distressing, is not unique in the world of M&A, where the failure to meticulously review and understand contracts can lead to unforeseen financial liabilities and strategic constraints.

The High Cost of Inattention

In the case of the Columbus deal, a hypothetical investment of $500k in thorough contract review and due diligence might have seemed steep at the outset. However, this investment pales in comparison to the $75 million loss incurred due to contractual oversights. More than a financial safeguard, this investment in due diligence would have provided a deep understanding of existing contractual obligations, enabling strategic decisions that could potentially have influenced the acquisition price itself, not to mention avoiding significant post-acquisition financial hemorrhage.

Leveraging Due Diligence for Strategic Advantage

Comprehensive contract due diligence offers more than just risk mitigation; it’s a strategic tool that can shape the entire trajectory of an acquisition. Understanding the nuances of every contract allows acquirers to:

  1. Identify potential liabilities that could affect the valuation of the deal.
  2. Negotiate better terms before closing, potentially saving millions.
  3. Strategically plan post-acquisition integration, aligning contractual obligations with business objectives and growth strategies.

Turning Tables: From Oversight to Insight

The Columbus debacle serves as a powerful lesson for M&A practitioners: due diligence, especially in contract review, should never be a mere surface formality. Instead, it should be viewed as a strategic exercise, an investment in the future success of the acquisition. By allocating resources—both financial and expertise—towards thorough contract analysis, businesses can transform potential pitfalls into strategic opportunities, ensuring that every contract not only aligns with but also enhances their post-acquisition strategy.

In Conclusion

The story of the Columbus acquisition’s $75 million mistake is a call to all involved in M&A to prioritize comprehensive contract due diligence. This process is not just about uncovering potential deal-breakers; it’s about investing in the future success and strategic alignment of the acquisition. Let the Columbus tale be a reminder of the importance of contracts in shaping the outcome of M&A deals, turning due diligence from a perfunctory task into a cornerstone of strategic M&A planning.

The Strategic Trio: Compliance, Risk Mitigation, and Cybersecurity in M&A Contract Transitions

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In the complex landscape of mergers and acquisitions (M&A) within highly regulated industries, the importance of compliance, risk mitigation, and cybersecurity cannot be overstated. These critical elements act as the pillars supporting a successful transition process, safeguarding against potential legal, financial, and reputational damages.

Navigating the maze of regulatory requirements is a challenge during M&A activities. Compliance ensures that the newly formed entity adheres to industry standards and legal obligations, mitigating risks associated with regulatory infractions. This phase demands a meticulous review of existing and prospective contracts to ensure they align with both current regulations and those of the merged entity’s future landscape. Strategies for seamless compliance include conducting comprehensive audits, engaging with regulatory experts, and implementing robust process and governance frameworks to guide the transition.

Risk Mitigation: The Shield Against Uncertainty

Risk management is an integral part of the M&A process, serving as a proactive measure to identify, assess, and address potential threats. Effective risk mitigation during contract transitions involves a detailed analysis of contractual obligations, liabilities, and the potential for disputes. By prioritizing issues based on their impact and likelihood, companies can allocate resources efficiently, focusing on high-risk areas such as intellectual property rights, data privacy, and financial obligations. Establishing clear communication channels and contingency plans further strengthens the organization’s resilience against unforeseen challenges.

In today’s digital age, cybersecurity is paramount, especially during the tumultuous period of M&A contract transitions. The exchange of sensitive information, integration of IT systems, and changes in data governance expose organizations to heightened cyber risks. Protecting this data requires a comprehensive cybersecurity strategy, encompassing encryption, access controls, and continuous monitoring of systems and networks. Collaboration between IT, legal, and cybersecurity teams ensures that cybersecurity considerations are integrated throughout the contract transition process, from due diligence to post-merger integration.

Conclusion: A Holistic Approach to Secure M&A Transitions

The interplay between compliance, risk mitigation, and cybersecurity forms the backbone of a secure and successful M&A contract transition. As companies venture through these complex processes, the focus must remain on establishing a solid foundation that supports the long-term vision of the separated or merged entity. Embracing a holistic approach, underpinned by strategic planning, collaboration, and the use of advanced technologies, positions companies to navigate the intricacies of M&A transitions, turning potential challenges into opportunities for growth and innovation.

This synthesized approach offers readers a comprehensive understanding of the critical considerations during the M&A process, emphasizing the importance of a multidisciplinary strategy to ensure a smooth and secure transition.

Maximizing Contract Value in the Fast Lane: The Crucial Role of Management During M&A

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In the world of business, contract management is often visualized as a journey where the path from initiation to conclusion is not just a timeline but a value-generating process. As contracts progress over time, their potential to add value increases with diligent management. However, during mergers and acquisitions (M&A), this timeline is compressed, necessitating swift and strategic actions to extract maximum value and ensure a smooth transition.

The Traditional Trajectory of Contract Management

Typically, contract management follows a chronological order where the initial phases focus on negotiation and signing, followed by execution, monitoring, and finally, renewal or termination. Over time, proactive management can uncover opportunities for cost savings, efficiency improvements, and enhanced performance, effectively increasing the contract’s value to the organization.

The Accelerated Timeline of M&A Transitions

In contrast, the M&A scenario presents a radically different timeline. The urgency of M&A transactions means that the process of reviewing, transitioning, and integrating contracts must be accelerated. Due diligence requires rapid assessment of the existing contracts to identify liabilities, obligations, and synergies. The transition period following the acquisition or merger demands quick actions to integrate contracts into the new organizational structure, negotiate new terms, or terminate agreements that no longer serve the merged entity’s strategic goals.

The challenge in M&A contract transition is not just the accelerated timeline but also the high stakes involved. Mistakes or oversights can lead to significant financial liabilities or missed opportunities. The compressed timeline means there’s less room for the gradual extraction of value typical in standard contract management processes. Instead, strategic decisions must be made swiftly to align contracts with the new entity’s objectives, mitigate risks, and capitalize on synergies.

Comparing the Two

Comparing traditional contract management with M&A transitions reveals two key differences: the timeline and the strategic approach. While both aim to maximize contract value, the accelerated timeline of M&A transitions demands a more strategic, focused, and often preemptive approach. Success in M&A contract management requires a deep understanding of both entities’ contracts, a clear vision of the combined or separated entity’s strategic direction, and the agility to make swift decisions.

Conclusion

Whether in the steady state of ongoing business operations or the rapid pace of M&A activity, the core principle remains: well-managed contracts are a source of value and competitive advantage. In the context of M&A, the ability to quickly assess, transition, and optimize contracts is critical. It requires a blend of legal expertise, strategic foresight, and operational agility that can turn the inherent challenges of a compressed timeline into opportunities for growth and value creation.

The Crucial Role of Due Diligence and Contract Transition in Pharmaceutical M&A

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In the high-stakes world of pharmaceutical divestitures, mergers and acquisitions (M&A), the due diligence and contract transition phases are pivotal. These stages are filled with unique challenges and nuances that can significantly impact the success of an acquisition or divestiture. Understanding these nuances is essential for navigating the pharmaceutical landscape effectively and ensuring a smooth transition and integration of assets.

Due diligence in pharmaceutical M&A goes beyond financial audits and legal compliance checks. It involves a comprehensive review of the target company’s drug pipeline, intellectual property (IP) portfolio, regulatory approvals, clinical trial data, and market potential of products. This deep dive helps acquirers to assess not just the current value but also the future potential and risks associated with the target’s assets. Critical issues such as patent cliffs, regulatory hurdles, and market exclusivity periods must be evaluated to make informed decisions.

Conclusion

Navigating the Waters of M&A+®: Transition vs. Integration

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In the complex realm of mergers and acquisitions (M&A), two critical phases stand out: transition and integration. While often used interchangeably, these stages hold distinct roles in the success of any M&A venture. Understanding the nuanced differences between them is crucial for business leaders steering their companies through the choppy waters of M&A.

– Aligning financial reporting systems.

– Integrating IT infrastructure on a surface level.

– Maintaining essential services through TSAs.

– Addressing immediate regulatory and compliance requirements.

– Harmonizing organizational cultures and values.

– Consolidating product lines and customer bases.

– Merging IT systems and data management platforms comprehensively.

– Implementing strategic initiatives to achieve long-term synergies.

A Typical Day for a Project Attorney During a Spin-Off

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A typical day for a project attorney involved in a spin-off acquired by a private equity firm, transitioning to a standalone entity, is a blend of strategic planning, meticulous analysis, and constant communication. Here’s an inside look at how these legal professionals navigate their day to ensure the success of such a complex transaction:

Skimping on Transition Teams: A Case Study on the High Cost of Underestimation

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In the fast-paced world of mergers and acquisitions (M&A), the integration phase is where the rubber meets the road. The successful melding of two companies is a complex, intricate process that demands meticulous planning, execution, and oversight. The importance of investing in a skilled transition team cannot be overstated, yet some companies, in a bid to cut costs, underestimate this critical step. This case study explores the consequences faced by a hypothetical company, TechMerge Inc., which learned the hard way that skimping on a transition team can lead to disastrous results.

 

Background

TechMerge Inc., a leading technology firm, acquired a smaller competitor with the aim of expanding its market share and product offerings. Focused on maximizing cost efficiencies, TechMerge opted for a lean approach to the transition, relying on their internal staff to manage the integration without investing in a specialized transition team.

Without the guidance of experienced transition specialists, the integration process was chaotic. Key issues included:

2. Systems Misalignment: With no experts to oversee the integration of IT systems, the companies faced prolonged system downtimes, data breaches, and operational inefficiencies.

The consequences of underinvesting in a transition team were severe for TechMerge:

TechMerge’s experience underscores the false economy of skimping on a dedicated transition team during M&A activities. The company recognized too late that the cost of rectifying the integration missteps far exceeded the investment in a skilled team capable of navigating the complexities of merging two distinct entities.

Investing in a competent transition and integration team is not an optional expense but a critical component of successful M&A activity. Companies like TechMerge serve as a cautionary tale, highlighting that the true cost of underestimation can be exponentially higher than the perceived savings. The right team not only prevents costly mistakes but also unlocks the full potential of the merger, ensuring that the venture is a success story rather than a cautionary tale.

The Twilight Zone of M&A: Navigating the Strange World of TSA Periods

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In the labyrinth of mergers and acquisitions (M&A), the Transition Service Agreement (TSA) period often feels like a journey through a twilight zone, an interim phase filled with peculiar challenges and opportunities. TSAs are agreements that provide for the seller to continue offering critical services to the buyer for a specified period after the deal has closed, ensuring business continuity until the buyer is capable of standing on its own.
The Paradox of TSAs
TSAs are born out of necessity, bridging the gap between acquisition and autonomy. They are peculiar because, while they ensure continuity, they also create dependencies. This period is marked by a delicate balance of cooperation and separation, as two entities bound by the recent transaction navigate their new roles.
Advantages of a Swift TSA Exit
While the TSA period is beneficial for ensuring business continuity, lingering in this phase for too long can have its drawbacks. Here are compelling reasons to expedite the exit from a TSA:
1. Cost Efficiency.  TSAs are not free. Buyers typically pay for the services received under these agreements. The longer the TSA period, the higher the costs, which can erode the deal’s value. Exiting the TSA swiftly can help in cost savings and budget optimization.
2. Operational Independence.  Relying on the seller for critical services can impede the buyer’s ability to make swift operational changes and innovations. Gaining autonomy accelerates the integration process, allowing the buyer to fully implement its vision and operational strategies.
3. Strategic Agility.  The sooner a company exits the TSA, the quicker it can pursue its strategic objectives without constraints. This freedom is essential for making decisions that align with long-term goals without needing to navigate the complexities of coordination with a former owner.
4. Cultural Integration.  One of the more subtle challenges during the TSA period is the potential for cultural misalignment, especially if the seller’s employees are providing services to the buyer. Exiting the TSA facilitates smoother cultural integration, as the acquiring company can fully instill its values, practices, and culture without external influences.
5. Mitigating Risks. Prolonged TSAs can expose the buyer to various risks, including service quality issues or changes in the seller’s business priorities. An expedited exit minimizes these risks, giving the buyer control over its destiny.
Navigating the Exit
Exiting a TSA is not without its challenges. It requires thoughtful planning, clear communication, and often, significant investments in technology, systems, and talent. The key to a successful transition lies in detailed due diligence prior to the deal’s closure, ensuring a clear understanding of what it will take to achieve operational independence.
Leveraging Technology for a Smooth Transition
This is where tools like our proprietary technology platform and In2insights real-time dashboards become invaluable. These tools offer a comprehensive view of the transition process, tracking progress, identifying gaps, and ensuring that nothing falls through the cracks. They facilitate a structured exit strategy from the TSA, enabling companies to manage the transition effectively, minimize disruptions, and accelerate the journey to full autonomy.
Conclusion

The TSA period, while a critical phase of the M&A process, is one that companies should aim to navigate swiftly and efficiently. The strategic use of technology and thorough planning can turn this strange interim into a period of opportunity, setting the stage for a successful, independent future post-acquisition. Exiting the TSA not only marks the end of one journey but also the exciting beginning of another, where the true value of the acquisition can be realized and leveraged to its fullest potential.