Tax Free Spin off of Clinical and Medical Products Businesses

Centric was engaged to assist with the Contracts Workstream program management.

The Business Need

In September 2008, a major health care company announced plans for a tax-free spin-off of its clinical and medical products businesses as a separate public company.

A High-Impact Approach

The Contracts workstream was an integral and critical path element of the Spin. Centric added value in the following areas:

  • Provided guidance and oversight to internal business and legal teams to identify and establish “Arms-Length” commercial agreements b/w SpinCo and RemainCo for ongoing post-spin business relationships.
  • Program managed the process from identifying “Spin-Impacted” Direct and Indirect Vendor Contracts to establishing the appropriate relationships with these vendors, according to the Day 1 Strategy (Stand-up a separate contract for SpinCo, Assign it to SpinCo, or obtain vendor consent to use the existing contracts to provide Transition Services).
  • Program managed the process and coordinate functional teams in the establishment of service descriptions with appropriate durations and costs for RemainCo to provide transition services to SpinCo (and vice versa) while separation of the companies takes place.
  • Assisted in establishing an Interlinking Commercial Agreement (ICA) & Transition Services Agreement (TSA) Governance Model & related invoicing and payment processes.
  • Coordinated post-spin tracking, billing, accounting and forecasting, reporting and following up on issues related to the TSA and PSA (Project Services Agreement).
  • Assisted with management of Asset Separation/Transfer process which involved many functional areas and resources.

Results

Centric managed the establishment of Commercial Agreements and  Transition Services Agreements to enable the “Spin”.