1. Reconfirm current-state operations
- Review the current-state operations immediately after signing, as in-scope assets may change
2. Execute plan to operationalize new legal entities
- Review plan for long-lead-time countries due to transaction structure requirements (e.g., stock vs. asset sale, insufficient buyer readiness, enterprise resource planning (ERP) systems may need to be configured to support the new legal entity)
- Get vendors (e.g., financial institutions and payroll providers) prepared for the timeline
3. Finalize Day 1 operating models to close the deal
- Consider workarounds, whereby the seller continues to operate portions of the business on behalf of the buyer
- Drive Day 1 operating model development so that the deal closes and transition support is minimized
4. Focus on execution of separation plan to shorten time to close and minimize workarounds
- Address critical functions requiring significant resources to support:
- Interim reporting (e.g., enabling the buyer to close the books Day 1)
- ERP systems often require logical and physical separation of commingled data and systems
- Address marketing products: managing product registration lead times
- Understand competing seller strategic initiatives and potential impact on separation activities
- Enable buyer readiness to avoid closing delays (e.g., systems capabilities; presence within existing markets, weight of speed [TSAs] vs. value [degree of separation by close])
- Focus on Day 1 “must-haves” and challenge buyer’s optimization efforts (e.g., emphasizing critical functions such as order-to-cash)
- Anticipate currency controls and banking rules to avoid stranded cash
- Consider customer and supplier contracts, including property leases, which may require notifications or a lengthy consent process
5. Confirm TSA service delivery model
- Finalize the TSA schedules, which document how post-closing services will be delivered, disputed and exited
6. Align stranded cost mitigation with TSA exit planning
- Finalize requirements to support buyer with services under a TSA, which may restrict ability to mitigate stranded costs
- Set ambitious budget targets to hold business unit leaders accountable for mitigating stranded costs
7. Assign a high priority to closing out works council and union negotiations (as needed/where required)
- Review changes in employment terms and conditions and legal entities that drive employee consultation requirements
- Close out negotiations on transfer requirements to avoid closing delays
8. Tailor the communications strategy to each constituent
- Contact key customers and suppliers as soon as the deal is announced
- Maintain dialogue with customers and suppliers on changes to how they order or pay to minimize disruptions and implement a dispute resolution process
- Implement an employee communications strategy addressing transition arrangements, time off, compensation, year-end processes and changes to health or pension benefits
9. Evaluate Day 1 readiness within 30-45 days of close to allow adequate time to change course
- Enable progress monitoring, risk identification and timely issue resolution
- Focus on interdependencies, such as the impact of a system blackout period during cutover
- Conduct Day 1 readiness workshop as a joint session to gain full alignment that closing is actually ready to happen from the perspective of both the seller and buyer