In January 2020, AECOM sold its Management Services business to affiliates of American Securities and Lindsay Goldberg. The announced price was $2.405 billion, subject to customary adjustments for cash, debt and working capital. The business became Amentum, an independent government services company.
The deal shows how large a corporate carve-out can be. It also points to a less visible challenge: once a business leaves its parent, it must stand on its own. Customers still need to be served, employees paid and systems maintained. A buyer may acquire an established operation, but also inherit the work of separating it from the company that used to support it.
Starting a company is one route to ownership. Buying a business unit is another. A divestiture can come with customers, employees, contracts, equipment and revenue already in place. But a division that works well inside a corporation may depend on its parent for payroll, technology, insurance, purchasing or financing.
For Black executives, experience managing teams, budgets and operations can be a strong starting point. It does not answer every question a buyer has to ask. Before making an offer, they need to understand the unit’s financial performance, the cost of running it independently, the financing available and the work required to complete the separation.
When a Division Becomes a Company
Corporations sell units for many reasons. They may want to concentrate on core operations, reduce debt or simplify their portfolios. A buyer may see room to grow a business that its current owner no longer considers strategic. That does not necessarily mean the unit is cheap—or that it is struggling. Its value depends on what is included in the sale, what obligations come with it and whether it can support the purchase price.
AECOM said the sale would sharpen its focus on professional services and support debt reduction and share repurchases. Those were the seller’s stated objectives. The completed transaction transferred the Management Services business to its buyers, who launched Amentum as an independent company. AECOM’s announcement reported a purchase price of $2.405 billion, including about $150 million in contingent consideration.
We are pleased to complete this value-enhancing transaction, which further hones our focus on our Professional Services business and we expect will enable us to accelerate debt reduction and share repurchases. — Michael S. Burke
When Amentum launched, the company described itself as independent and identified American Securities and Lindsay Goldberg as equal partners. Chief executive John Vollmer said it intended to continue serving customers under the new ownership. That statement conveyed a plan; it did not demonstrate how the company performed afterward. In any acquisition, a seller’s rationale, a buyer’s ambitions and the results achieved later are separate pieces of evidence.
A smaller transaction offers a different look at the process. In 2022, Mace Group announced that its facilities management division, Mace Operate, would become Macro in a management buyout led by chief executive Ross Abbate, finance chief Chris Bampton and Mace deputy chair Mark Holmes. Mace said Macro had more than 700 employees worldwide and annual turnover of £130 million. It also announced that the new company would receive nine months of transition services. Those figures describe the scale Mace reported at the time; they do not show whether Macro was profitable or how it performed later.
The AECOM–Amentum and Mace–Macro deals are not examples of Black-led acquisitions. Their value here is that they show different ways a business can leave a parent—and the separation work that follows. For an executive considering a purchase, that work belongs in the analysis from the start.
As an independent company we will be able to build on that success to invest in new and transformed services for our clients.
— Ross Abbate,
Look Past Revenue and Reputation
A business unit’s name, customer list and reported revenue can make it attractive. They do not tell a buyer how much cash it generates or what it will cost to operate alone.
Due diligence should include several years of financial statements and tax records, customer revenue, contracts, debt, capital spending and working-capital needs. Revenue is only one part of the picture. The buyer needs to know what remains after ordinary expenses and necessary investment—and whether that cash can service acquisition debt.
Parent companies often allocate costs across divisions. Some expenses may disappear after a sale. Others will have to be replaced. A buyer should estimate the price of standalone finance, human resources, information technology, insurance, compliance, facilities and executive leadership. If the parent currently handles payroll or cybersecurity, someone must be ready to take over.
Customers also need a closer look. A few large clients may account for much of the unit’s revenue. Check when contracts come up for renewal, whether they can be assigned to a new owner and whether a change in control gives customers the right to terminate. A corporate brand may have helped win their business. The buyer needs evidence that they will stay when the business has a new name and owner.
Operational experience helps executives ask sharper questions, but impressions need to be checked against records. Have margins held steady? Will equipment or systems need a major investment? Does the operation depend on a handful of employees? If customer relationships or the company’s reputation belong mainly to the parent, determine what support—if any—will carry over.
Find Out What the Parent Still Does
The organizational chart may show where a division sits. It may not show how much it relies on the parent.
The parent might own software licences, hold supplier contracts, run accounting systems or provide insurance. Some of these arrangements may transfer to a buyer; others may end at closing. Buyers need an inventory of those dependencies, along with a realistic estimate of the money and time needed to replace them.
A transition services agreement, or TSA, can bridge the gap. It is a contract under which the seller provides specified services after the sale for an agreed period and fee. It should spell out the services, costs, performance expectations, data access, responsibilities and process for ending or extending support.
The separation of Jacobs Solutions’ government services business into Amentum offers a large-company example. Jacobs and Amentum filed a TSA with the SEC in 2024 covering services the companies would provide to one another, including corporate, information technology and project services. The agreement set out the services, extension terms and increased fees. The details will differ in smaller transactions, but the need for clear scope, costs and deadlines is the same. SEC filing
A TSA gives a buyer time to build or find replacements; it does not make the business independent. Before closing, someone should own each part of the transition. The buyer needs to know what must be ready when seller support ends, and what happens if new systems are delayed. Employees may have questions about benefits and reporting lines. Customers may notice a disruption. Those problems can affect revenue well before the separation is complete.
Choose Financing That Leaves Room to Operate
An acquisition can be funded with buyer equity, a bank loan, seller financing or outside investors, often in combination. Each source comes with costs and trade-offs. Lenders want to see that the company can repay debt. Investors may contribute capital and experience, but they may also receive ownership and decision-making rights. Seller financing can help close a funding gap, provided the repayment schedule fits the company’s cash flow.
The U.S. Small Business Administration says its 7(a) loan program may be used for complete or partial changes of ownership, among other eligible purposes. The program’s maximum loan amount is $5 million. Borrowers must meet eligibility requirements, including creditworthiness and a reasonable ability to repay. Applications go through participating lenders; the SBA does not lend directly. Whether a transaction qualifies—and on what terms—depends on the deal and lender review.
A large carve-out may need more capital than an SBA-backed loan can provide. Whatever the deal size, the purchase price is only part of the budget. Transaction expenses, working capital, new systems, legal advice and separation costs can all come due after closing. A buyer who uses every available dollar to acquire the business may leave it without enough cash to run.
Assemble the Team and Plan the First Year
An executive’s experience is useful, but a deal involves work outside most operating roles. Depending on the transaction, the buyer may need an acquisition attorney, accountant, lender, tax adviser, insurance broker and operating leaders familiar with the business. Industry knowledge is an advantage; it does not replace a review of the contracts, tax exposure, financial statements and financing terms.
Co-investors make governance just as important. Before closing, agree on decision rights, board representation, future capital contributions, distributions and how disputes will be handled. Also consider what happens if the company needs more money than expected or one partner wants to exit.
The operating plan should name the people responsible for customer communications, employee retention, system replacement and standalone services. It should allow for delays, lost revenue and higher-than-expected costs. The tasks may sound mundane—moving data, renegotiating vendor contracts, setting up payroll—but customers and employees will feel the effects if they are mishandled.
The Real Test Comes After Closing
A corporate divestiture can give an experienced operator a route into ownership: acquire an established business, then build what it needs to function independently. AECOM’s sale and Mace’s management buyout show different transaction structures. Both make clear why the purchase price is only part of the story.
For Black executives, experience running people and operations can help identify a promising target and lead it through a transition. Ownership brings different responsibilities: managing cash flow, financing, governance, customer relationships and standalone systems. The opportunity is real, but so is the work required to make the acquired company durable.
FAQs
What is a corporate divestiture?
It is the sale or separation of a company’s business unit, assets or operations. Depending on the deal, a buyer may acquire an existing operation along with its customers, employees, contracts and equipment.
How is a management buyout different from a divestiture?
A divestiture describes a business leaving its parent company. A management buyout describes who buys it: some or all of the business’s managers. Managers can lead a buyout of a divested unit.
What should buyers examine before acquiring a business unit?
Review its financial statements, tax records, customer contracts, debt, working-capital needs, employee retention and equipment. Find out which services the parent provides and estimate the cost and time required to replace them.
What does a transition services agreement do?
It sets the terms for services the seller provides to the buyer after closing. It should define the services, fees, time limits and responsibilities, along with what happens if support needs to be extended or replaced.
Can an SBA 7(a) loan finance an acquisition?
The SBA says 7(a) loans may be used for complete or partial changes of ownership, subject to eligibility and lender approval. The maximum loan amount is $5 million. Borrowers apply through participating lenders and must demonstrate an ability to repay.
Does corporate experience guarantee success as an owner?
No. Corporate experience can help an executive understand operations and lead teams, but ownership also requires managing financing, governance, cash flow and standalone systems. Due diligence and a realistic transition plan remain essential.
