Hello! I have a couple of case interviews coming up in the area of carve-outs and PMI.
How can I best prepare for such carve-out and integration cases, for example at EY-Parthenon? What kind of framework works well for these cases? And where do calculations typically occur?
I would greatly appreciate any insights on how best to approach this strategically. Thank you in advance!
hey, happy to help here. lots of folks have shared what works for these interviews so can pass that along.
carve-outs arent like normal M&A cases. forget the standard "synergies and cultural fit" stuff. here youre basically doing surgery on a company, so your framework needs to reflect that.
what actually works:
scope first - literally draw a circle around whats being sold. sounds dumb but half the candidates mess this up. is it a product line? a geography? a division? everything else flows from this.
the three entanglements - once you know the scope, map what sticky stuff connects the carve-out to mom. usually its:
standalone economics - can this thing actually breathe on its own? whats the cost gap between being supported by mom vs hiring their own finance team, their own IT helpdesk, etc. interviewers love when you flag that the carved out biz might look profitable but thats only because theyve been subsidized.
TSA hell - transition service agreements. who pays for what and for how long. this is where your numbers usually show up. calculate the TSA fees, the one-time separation costs, and the stranded costs that mom eats.
for PMI cases its different. here you want:
synergy math - revenue synergies (usually overstated, be skeptical) vs cost synergies (the reliable ones). know how to calculate headcount reductions, real estate consolidation, vendor savings.
speed vs risk - fast integration captures value quicker but breaks stuff. slow is safer but you bleed synergies. have a point of view on which lever matters more for the specific case.
the 100 day plan - what happens week 1 vs month 6 vs year 2. consultants love this timeline.
where the math hits:
calculations usually test if you can turn operational stuff into dollar impact. like: "we think we can cut 200 heads, average comp is 80k, whats the saving?" or "IT integration costs 50m upfront but saves 8m a year, whats the payback?"
they also love standalone cost gap analysis for carve-outs. "current SG&A is 15% of revenue with moms support, standalone will be 22%, revenue is 400m, whats the profit hit?"
for EY-P specifically:
their cases are candidate-led which means you drive. dont wait for prompts. also they use a "defend" section where they push back on your recommendation, so actually believe your own answer.
and practice mental math. they throw tables at you and expect you to calculate synergies on the fly without getting flustered.
hope that helps - let me know if you want me to go deeper on any part.
