Shaping what's next
Jessica Mottau on new opportunities in carve-outs
Jessica is a partner specialising in technology, media and telecommunications with extensive experience acting on complex carve-outs and major procurements and outsourcings.
A carve-out is a pivotal moment for a business. In recent years we're seeing more of them, and they’re becoming more complex. Sellers are opting to carve out parts of their business to streamline operations, respond to regulatory burdens or focus on core revenue drivers. Economic and geopolitical uncertainty, ESG pressures and the need to simplify sprawling multi-jurisdictional operations are all driving this trend.
Carve-outs are highly complex transactions because of the entanglements between what's being sold and what's being retained. For lawyers, carve-outs require a deep understanding of the business to figure out all the various linkages – IT systems, back-office functions, people, real estate, IP, logistics – and establish replacements.
Global supply chains add another layer of complexity – one day we might be on the phone with the supply team to understand product lead times and how volumes are managed, the next we might be speaking with the finance team about rebate or incentive arrangements, or the IT team about systems cutover. Despite the variation, the one constant is that business continuity is critical. We're always looking to ensure the negotiated arrangements align with and support the real-world operation of the business.
One of the most interesting developments has been the emergence of data as a key value driver in carve-out transactions. Companies are holding deeper, richer data, and there’s a growing appreciation of its importance – not just for continuity, but for insights, AI training and competitive advantage. As the value of data goes up there is greater scrutiny on the origins of that data and the rights that attach to it. Even if you buy a business and acquire its data, you need to understand what rights you have to use it.
Of course, the regulatory landscape is evolving too, with more attention being paid to privacy and cyber risk. The Federal Court's recent Australian Clinical Labs ruling (which held Australian Clinical Labs responsible for a cyberattack suffered by a target company shortly post-acquisition) makes it clear: buyers are expected to perform robust cyber due diligence and plan carefully for cyber risk before and during transition and integration.
We're seeing greater risk, but also greater opportunity, particularly when it comes to digital transformation. Businesses can capitalise on a fresh start by procuring or building new systems from the ground up rather than replicating the seller's IT environment. Buyers are increasingly considering how they can stand up improved IT systems for acquired businesses, to boost competitive advantage, for example by transitioning to cloud systems or rolling out AI agents.
The nature of carve-outs has evolved. Now, it’s a multifaceted conversation. Beyond ensuring business continuity, we're talking about privacy and competition risk, data sharing relationships, digital transformation and AI adoption. There's a lot more ground to cover.
Read Jessica's CV, or contact for further information
