Carving out a non-core division, and finding its natural owner.
A sell-side carve-out of a non-core renewable energy manufacturing division for a private equity sponsor, executed to preserve the business as a going concern and place it with the one buyer strategically positioned to own it.
- Sector
- Renewable Energy Manufacturing
- Transaction
- Corporate Carve-Out & Cross-Border Sale
- Closed
- 2023
- Headline Result
- Going concern preserved
A carve-out with a mandate attached.
A private equity sponsor had just acquired a precision aerospace manufacturer, a deal that carried a commitment to divest a non-core renewable energy manufacturing division, with proceeds flowing to the sponsor. The division, a long-held priority of the former owner, made renewable energy equipment.
The sponsor’s mandate was specific: a clean exit that kept the business and its product line running as a U.S. operation: not a wind-down, and not a sale for parts. Madfarm was engaged as sell-side advisor.
Where the hard problems were operational.
A carve-out whose most demanding work was practical, not paper, and much of it continued after close.
A Clean Structure
The division already sat in its own legal entity, so the transaction could be a stock purchase, skipping a full asset carve-out and the delay that comes with it.
A TSA That Held Through the Move
The manufacturing footprint relocated across state lines almost simultaneously with closing. A transition services agreement set the guardrails for custody, tracking, and handoff of significant work-in-progress and parts inventory, protecting both parties as the operation moved.
Grant & Regulatory Continuity
Federal research-lab R&D grants and relationships transitioned to the new owner without interruption, and the business stayed compliant through both the change of control and the relocation.
Sponsor Governance
We ran KYC and sanctions screening on a foreign acquirer and flagged cross-border risk for the sponsor’s LP group. The asset was small; the governance around it couldn’t be.
A thin domestic pool isn’t a dead end.
The thesis: find the buyer whose strategy and timing made the asset worth more to them than to anyone else.
Widen the Field
Domestic buyer interest was weak, so we deliberately widened the search to international participants, looking well beyond the obvious pool.
A Buyer-Specific Thesis
European renewables had matured and subsidies were fading, pushing European capital toward U.S. growth, while Inflation Reduction Act incentives favored domestic clean-energy manufacturing. The eventual buyer, an international renewable energy company fresh off a raise led by a major European utility, carried a mandate to establish U.S. manufacturing. The division’s federal research relationships added strategic value.
Two Audiences to Win
Closing meant convincing two parties, not one: the buyer’s management and its lead institutional investor.
Guiding a first-time U.S. acquirer.
This was the buyer’s first U.S. acquisition. A meaningful part of our role was getting it comfortable with a U.S. deal process and, after close, helping it build local business relationships in its new operating market.
A business preserved, not parted out.
We built the process around the mandate (continuity and a clean exit over headline price) and delivered a buyer strategically positioned to own the business for the long term.
A thin domestic buyer pool isn’t a dead end. We built the process around the sponsor’s mandate, a clean exit that kept the business a going concern, and found the one buyer strategically positioned to own it: an international strategic for whom timing and thesis made the asset worth more than to anyone else.
The hardest carve-out problems are operational, and they continue after close.
Talk to the principal who would run your process.