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How do you create value from a spin-off

We caught up with Bengt Claesson from NCC at this year’s Nordic M&A and Private Equity Forum, to find out how you create value from a spin-off and to find out if he learnt any lessons from their recent carve-out. 

 

When NCC made a spin-off of their housing business they had one goal, to improve overall efficiency. Bengt explains the reasons it made sense for them "We had one business with two different logics. One is a B2C business that is very capital intensive, the other is extremely margin focused." Although both companies were essentially doing the same thing, building,  the business logics are so different that NCC would likley achieve a higher net income if they divided into two companies. 

We also wanted to find out what lessons NCC learned from the carve-out. Firstly, you must give the companies an identity "When you have done that they will strive for freedom and work much harder" Bengt said. The other lesson was conflict resolution. At the start it is important to have a plan, so that small issue don't become large issues "speed is important". 

Bengt was speaking in the boom in carve-outs and divestments on stage Q&A with Thomas Fossum Partner and Head of M&A Integration & Carve-out at PwC and Kasper Viio from Mergermarket. Watch the discussion here.

Published: 31 March

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