Best data rooms for carve-outs and divestitures

Selling a whole company is hard enough. Selling one part of it while the rest carries on is harder, because the documents were never organised around the piece you are selling. Contracts cover several divisions, the finance team serves the whole group, and the IT systems are shared. A carve-out data room has to show buyers exactly what they are getting, and nothing they are not.

Why a carve-out room is different

In a standard sale, the seller can broadly say “here is the company”. In a divestiture, almost every folder raises a boundary question:

• Which contracts transfer? Many customer, supplier and licence agreements are signed at group level and cover several businesses.
• Which people transfer? Some staff work only for the unit; others split their time, and some sit in shared service centres.
• What do the numbers really show? Divisional accounts usually rely on allocated costs. Buyers will want carve-out financials that show the unit as if it stood alone.
• What will the buyer need after closing? IT, payroll, finance and sometimes premises are provided by the parent through a transition services agreement (TSA) until the buyer can replace them.

Every one of those questions turns into documents, and every document risks exposing information about the rest of the group. That is the core design problem for the room.

Three piles of documents

Before anything is uploaded, the separation team should sort the material into three piles.

Pile one goes into the room in full. Pile three stays out, and the permissions should make it impossible for a bidder to stumble into it. Pile two is the difficult one: a group-wide supply agreement, for example, may be disclosed only in redacted form, with the pricing for other divisions blacked out and a note explaining how the contract will be split or replaced.

What to require from the room

Permissions that follow the boundary. You need groups for each bidder, plus internal groups for the separation team, group legal and the business unit management. Some unit managers will join the buyer after closing, so think carefully about what they see during the process.

Q&A that reaches group functions. Carve-out questions often land with people outside the deal team: group tax, group IT, the pensions team. A Q&A module that routes each question to an expert and holds the answer for approval keeps the process tidy. Ellty, Datasite, iDeals, Intralinks and DealRoom all offer Q&A in our data.

A plan for redaction. iDeals, Datasite and Intralinks offer in-room redaction. Ellty and DealRoom do not in our data, so pile-two documents would be redacted in a PDF tool first and checked before upload. Either approach works if the output is flattened, so the hidden text cannot be recovered. Our security features guide covers what to test.

Control over downloads. Group-level documents in pile two are the ones you least want circulating. Dynamic watermarking and document rights control, which all five rooms on this page offer in our data, let you allow viewing while restricting printing or saving.

A workspace before the room. Separation work starts months before bidders arrive. Having the same platform host an internal area where the team builds the index, drafts the TSA schedules and tracks open items saves a migration later. DealRoom’s request lists are designed for exactly this; the others handle it with internal-only folders.

Carve-out financials and the TSA

Two document sets deserve their own folders and their own care.

Carve-out financials. Buyers and their lenders will scrutinise how costs were allocated to the unit and what the standalone cost base will be. Upload the basis of preparation with the numbers, and expect Q&A on every allocation key. A quality of earnings report, if you commission one, should sit beside them.

TSA schedules. List each service the parent will provide, for how long and at what charge. Buyers price the deal partly on these schedules, and the length of the TSA depends heavily on how entangled the shared systems are. Keep drafts in a restricted folder and release final versions to the bidders who reach the last round.

A sensible order of work

1. Map the perimeter: legal entities, assets, people and contracts that transfer.
2. Sort documents into the three piles and agree the treatment of each shared contract.
3. Build the index in an internal area, with group functions uploading to their own folders.
4. Prepare carve-out financials and draft TSA schedules.
5. Open bidder groups with view-only, watermarked access and run Q&A through approvals.
6. At signing, export the full room and the Q&A log for the transaction record.

Our data room checklist and index template are good starting points for steps 2 and 3.

Choosing between the five

Full reviews: Datasite, iDeals, Intralinks, DealRoom.

Budgeting

Carve-outs take longer than whole-company sales because separation planning runs in parallel with the process. Budget for the room to be open well before the first bidder logs in and for some weeks after signing, while the TSA is finalised. A flat monthly price makes that easy to forecast; with per-page or quote-based contracts, ask what an extra quarter costs. See our pricing page for the main billing models.