Case Study · Carve-out · Southern Germany

€47M Revenue Stand-Alone in 9 Months: Carve-out of a Mechanical Engineering Division from a DAX Group in Baden-Württemberg.

Non-strategic mechanical engineering division of a DAX group with €47M revenue and 290 employees. From carve-out decision to operational stand-alone in three quarters.

● Year of Exit 2023 · Carve-out from DAX Group · 9 Months

Last updated: 5 June 2026

Through a carve-out, Tactical Management AG acquired in 2023, a non-strategic mechanical engineering division with €47M revenue and 290 employees from a DAX group in Baden-Württemberg. In 9 months operational stand-alone capability was established — including dedicated ERP infrastructure, 350 new supplier contracts and a 12-month transition service agreement (TSA) with the group. No site closures, no operational redundancies.

This case study documents a classic carve-out acquisition from a DAX group: a technically excellent but non-strategic division that withered under group governance because it cleared neither the investment nor the attention threshold of the parent company. With a clearly defined stand-alone plan and a fair transition service agreement, the division became operationally independent in three quarters.

The Situation: Technically strong division without group priority

The division produced special machinery for the packaging industry with a 40-year market position. Three plants in Baden-Württemberg, 290 employees, €47M revenue, EBITDA margin in the low single digits.

Within the DAX group, the division was categorised under 'other activities'. It was not a loss-maker, but its contribution to group EBITDA was below 0.3% — below the threshold at which investments are approved. CapEx had been withheld for three years. The workforce feared a relocation to Eastern Europe.

The carve-out decision of the group's management board was made in Q4 2022. Buyer selection criteria: location and employment covenants, no strategic-buyer competition (to avoid know-how outflow), close within 12 months.

What we did: Stand-alone architecture in three phases

Phase 1 (weeks 1–8): Indicative offer and carve-out architecture. Valuation via DCF with normalised earnings, not via group comparables. Asset deal structuring plus a 12-month transition service agreement (TSA) for IT, procurement, accounting and HR.

Phase 2 (weeks 9–24): Due diligence, carve-out preparation and closing. Parallel workstreams: ERP migration (from group SAP to a dedicated system), supplier recontracting (350 agreements), customer recontracting with preserved framework agreements, banking financing of the working-capital line.

Phase 3 (weeks 25–40): Operational stand-alone. Dedicated accounting in production. Dedicated IT infrastructure. Dedicated sales team. Full legal and operational capability without TSA dependency.

No workforce reduction. No site closure. Three new strategic CapEx items were approved in the first year after stand-alone — investments that had been impossible within the DAX group for three years.

Signature element: Transition service agreement instead of cliff edge

The critical bottleneck in a carve-out is not closing — it is the day after. If IT, procurement, accounting and HR suddenly stop functioning at closing, the acquired business burns out operationally within 60 days.

We negotiated a 12-month TSA with the group that continued to provide the administrative functions at cost plus margin. In return we committed to defined migration milestones (ERP Q2, procurement Q3, HR Q4, accounting Q4).

The TSA model is the standard architecture for clean carve-outs from DACH groups. It protects both sides: the group has no hidden warranty claims, the buyer has operational continuity.

Transaction Details

Year of Exit

2023

Geography

Baden-Württemberg, Germany

Sector

Mechanical Engineering (special machinery)

Mandate Type

Carve-out from DAX Group

Timeline

9 months (LOI to stand-alone)

Outcome

Operational stand-alone

Key Figures

€47M

Revenue acquired

290

Employees acquired

Site closures

Process

From scoping to closing

Indicative offer

Valuation on pro-forma stand-alone basis (DCF), not via group comparables. Location and employment covenants contractually fixed.

Carve-out architecture

Asset deal structuring plus 12-month TSA for IT, procurement, accounting, HR — at cost-plus-margin with defined migration milestones.

Due diligence

Commercial: order book and OEM contracts transferable. Financial: pro-forma EBITDA after eliminating group management fee. Technical: assets, software, patents.

Supplier recontracting

350 individual supplier agreements newly set up within the asset deal — including discount structures and payment terms.

ERP migration

Migration from group SAP to a dedicated system in Q2–Q3. Parallel operation for 90 days, then cut-over.

Banking financing

Working-capital line arranged with two Swiss banks. Group as guarantor backstop for the first 12 months.

Operational stand-alone

Dedicated accounting in production. Dedicated IT infrastructure. Dedicated sales team. Full legal and operational capability without TSA dependency. Three CapEx approvals in year 1.

Results

Every workstream delivered

Metric	Before Mandate	Outcome
Revenue	€47M (within DAX group)	€47M (stand-alone)
EBITDA margin	~3%	~7% (year 1 after carve-out)
Headcount	290	290 (no reduction)
Sites	3 in Baden-Württemberg	3 (no closure)
CapEx approvals per year	0 in 3 years	3 investments in year 1
TSA remainder	—	0 after 12 months (all migrated)

Frequently asked questions

FAQ

What is a carve-out from a DAX group and why does it happen?

A carve-out is the divestment of a division or subsidiary that no longer belongs to the strategic core of the group. Typical triggers: portfolio sharpening (focus on core), valuation drag (the division pulls down the group multiple), CapEx conflict (the division needs investments that are not prioritised), or regulation (antitrust requirements). For the division itself, the carve-out is often liberation from structural neglect.

Why is a transition service agreement (TSA) critical in carve-outs?

Operational functions like IT, procurement, accounting and HR are centralised in a group. On closing day they are abruptly missing from the divested division. A TSA extends these central functions for 6–24 months at cost reimbursement while the buyer builds dedicated structures. Without a TSA the acquired business typically burns out operationally within 60 days.

How does Tactical value a carve-out division when no stand-alone accounts exist?

Through pro-forma accounts: we reconstruct the division as a stand-alone entity with normalised earnings by eliminating intragroup transactions (management fees, transfer pricing, group IT allocations) at market prices or removing them entirely. The difference between the group-internal 'EBIT contribution' and real stand-alone EBITDA capability is often 200–500 basis points — in either direction.

What location and employment covenants does Tactical give in carve-outs?

We give them contractually. In this specific case: no site closure for 3 years, no operational redundancies for 2 years, retention of collective bargaining. This is not a moral position — it is an economic one: employees and sites are the substrate of value creation in a special-machinery business with a 40-year market position. Anyone who liquidates that destroys the buyer case.

What size of carve-outs does Tactical typically take on?

Typically revenue €20–250M and 100–800 employees. Smaller and larger special situations we evaluate on a case-by-case basis. The decisive criterion is not size but stand-alone capability post-carve-out — whether the division can be operated independently in technical, commercial and organisational terms.

How long does a typical carve-out take from LOI to operational stand-alone?

In this specific case: 9 months. Realistic corridor for cleanly run carve-outs: 8–14 months. The critical phases are carve-out preparation (pro-forma, TSA negotiation, supplier and customer recontracting) and ERP migration.

Illustrative Tactical example transaction based on typical DACH Mittelstand distress patterns. Figures, size bands and timelines reflect market-standard values; identification with any specific transaction is not intended. Prepared to illustrate the Tactical method.

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