Leaving the Mothership - Employee Benefits for Spin-Offs

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When acquiring a spin-off from a corporate parent, benefits are key to post closing success and minimizing employee disruption. Employee benefits represent significant costs for middle market companies but are critical to attracting and retaining a talented and productive workforce.

Both strategic and financial buyers need to distinguish corporate “Mothership” spin-offs from purchase of a stand-alone company. Successful transition of employee benefits in spin-offs presents unique challenges. In a spin-off, you’re buying a business unit or subsidiary which was part of a larger group and the new entity either will now be standing on its own or integrated into other businesses of the acquirer.

This Briefing Paper focuses on the benefits issues confronted when the target spin-off leaves a large corporate parent to become a stand-alone company owned by a financial buyer. Strategic buyers will face many of these same concerns if the target is not immediately integrated into a broad based corporate benefits program.

About the Authors: Donna Rhodes Joseph is founder and CEO of Rhodes-Joseph & Tobiason Advisors, LLC (a woman owned and managed business) and Pete Tobiason is co-founder and President. They are Employee Benefits Professionals with experience as benefits leaders at a global multi-industry company where Donna was Director of Benefits and Pete was Assistant General Counsel-Employee Benefits. They are active professionally as speakers and authors.

This Briefing Paper consists of information of general interest and should be viewed and used solely for informational purposes. Rhodes-Joseph & Tobiason Advisors, LLC is an employee benefits advisory company which does not provide or engage in the practice of accounting, actuarial, brokerage, investment, legal or tax services.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Peter Tobiason, Rhodes-Joseph & Tobiason Advisors, LLC | Attorney Advertising

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