Los Angeles, California – November 14, 2026 – Compello Partners, an operator-led technology consulting firm that works with private equity sponsors and their portfolio companies, has published a case study describing how it helped a newly separated manufacturing and distribution business move onto its own IT systems in five months. The work allowed the business to exit its transition services agreement (TSA) seven months ahead of schedule and avoid an estimated $3.5 million in TSA fees. The full case study is available at https://compellopartners.com/case-studies/manufacturing-division-carve-out/.
The carve-out
A buyer acquired a $300 million manufacturing and distribution division from a $6 billion parent company. As in most carve-outs, the division did not leave the parent with its own technology. Its network, servers, business applications and enterprise resource planning (ERP) system all sat within the parent’s environment.
To keep the business running after the deal closed, the parties put a 12-month TSA in place, under which the parent continued to provide IT and other shared services for a monthly fee. In this case, the fee was approximately $500,000 per month. Every month on the parent’s systems added to the cost of the transaction, which made the speed of separation a financial priority as well as an operational one.
Right-sizing before building
Compello began with a rapid IT assessment of the division. Rather than replicate the parent’s enterprise-scale environment, the team sized the infrastructure and ERP to the needs of a $300 million standalone company and aligned the ERP plan with the buyer’s investment thesis.
From there, Compello designed and built the new company’s technology environment, including its local and wide area networks, servers, storage, desktops, voice over IP (VoIP) phone system and help desk.
Five months to a standalone business
The new infrastructure and ERP were in place within five months. With its own systems running, the business exited the TSA seven months before the end of its 12-month term. At roughly $500,000 a month, the seven months of fees the company did not pay came to an estimated $3.5 million.
“In a carve-out, the TSA is a clock, and every month on it costs money,” said Rich Ferraro, CEO and Managing Director of Compello Partners. “Our goal was to give this company systems sized for the business it is today, not the parent it came from, and to have them running early enough that the TSA stopped being a monthly expense.”
Why TSA exit timing matters to buyers
TSAs are a standard part of most divestitures. They protect the business on Day 1, but they carry ongoing fees and keep the new company dependent on systems it does not control. When exit dates slip, those costs continue and the operational changes a buyer planned to make after close can be delayed.
Compello’s IT carve-out consulting for private equity buyers covers the full separation, from IT due diligence and Day 1 planning through infrastructure build, application and ERP migration, and TSA exit. Additional case studies covering carve-outs, integrations and due diligence engagements are available on the Compello Partners website.
About Compello Partners
Compello Partners is a technology consulting firm serving private equity sponsors and their portfolio companies. Founded in 2015, the firm provides IT due diligence, carve-out and integration services, IT strategy and advisory, ERP services, AI strategy and adoption, security and compliance, operations consulting and managed IT services. Its mission is to help private equity firms use technology to support value creation across the deal lifecycle, from diligence to exit. More information is available at compellopartners.com.
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Website: https://compellopartners.com/
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