Fabio Yamasaki (Syntagma Capital) on finding value when others see only risk

When asked for Fabio Yamasaki's golden rule for M&A professionals navigating today's market, this two-word response comes without hesitation:

"Price discipline."

In a world of tariff wars, regulatory scrutiny, and financial volatility, this simple principle has become the cornerstone of successful deal-making.

For Yamasaki, who transitioned from 14 years at a Belgian chemical company to private equity in 2021, finding value isn't about chasing headline-grabbing deals. It's about spotting what he calls "hidden gems": overlooked business units that thrive when, finally, given proper attention and resources.

"What I enjoy a lot is seeing these hidden gems where people, for various reasons, often overlook the true value of a business", he explains. "Seeing that we can add value not only for the business but for the people that work on that business, for the stakeholders involved, seeing that thrive where it was neglected or left aside before, it's something I find personally very enriching."

In today's complex market, these undervalued carve-out opportunities are becoming increasingly appealing for their long-term value-creating potential. Turning neglected assets into success stories, however, requires far more than opportunistic deal-making. The playbook has evolved: operational improvement is core to investment thesis. From due diligence through to exit, a structured and repeatable playbook to transform businesses, with a focus on speed and operational excellence. Deal teams now need sharper due diligence, digital tools, and above all, the discipline to say 'no' when valuations don't make sense.

The geopolitical chessboard transforming M&A tactics
Today's deal environment bears little resemblance to five years ago. "Everybody can read the news to see that we live in a world shaped by a lot of geopolitical uncertainty with tariffs, and erratic governments that can significantly change the markets", Yamasaki says. "There's an increase in regulatory scrutiny, partially because of these geopolitical tensions, where governments want to say whether a certain investment can be done or technology can be transferred to certain shareholders."

These macro shifts create immediate practical implications, he adds. "One of the first questions people have been asking in any process is: What is the impact of tariffs on your business? And number two: What is your exposure to China?"

Beyond direct consequences lie more subtle secondary effects, like the potential recession of a business whose end markets could potentially be impacted. This uncertainty has created both caution and opportunity. While many investors hesitate, others see strategic openings, particularly in carve-outs from larger enterprises, streamlining operations in response to market pressures.

Why neglected assets become ‘hidden gems’
What makes carve-outs so appealing in this environment? According to Fabio, it comes down to corporate priorities and resource allocation decisions. "It's a question of priority, ultimately, because sellers have multiple priorities and need to allocate resources, money, and time where they see the biggest return", he explains. "There's a limited amount of resources they can allocate. Therefore, they end up leaving behind some businesses that are not bad in themselves, but can, with the right attention, thrive as well to become better businesses."

This dynamic creates opportunities for investors who recognise potential where others see only peripheral assets. These aren't failed businesses; they're simply units that haven't received sufficient attention to reach their potential.

His own career journey exemplifies this transition from corporate M&A to private equity carve-out specialist. "I was the Chief Financial Officer of an activity that was ultimately carved out from Solvay and sold to private equity. That's how my transition from corporate M&A to private equity came about; to a large extent because of my experience in M&A transactions of complex carve-outs."

This specialised expertise has grown increasingly valuable as deal complexity expands. "What I've realised over time is that the deals are getting more and more complex, and oftentimes what we do is cross-border and involves more and more geographies", he notes. "I see a tendency for sellers to be increasingly creative in separating their businesses and keeping ongoing dependencies."

Redefining how value gets discovered
Digital transformation has dramatically enhanced the ability to identify and evaluate valuable carve-out opportunities. "Information now is much faster and much more granular, which allows us to have much deeper analysis into the details of the business", Yamasaki explains. "For instance, doing a sales margin analysis of the layers of customers or products allows you to get a much better basis to substantiate your due diligence and valuation plans."

This technological evolution extends beyond data analysis. "Virtual data rooms allow you to have a massive amount of information. The AI-based tools allow you to speed up document review and spot red flags”, the carve-out specialist says. However, he cautions that cybersecurity is now critical, and while digital tools enhance capabilities, they don't replace human judgment. "A large portion of what we do relies on trust... Face-to-face interaction with management, buyers, or sellers remains extremely important."

The most value in data analytics comes in commercial and operational due diligence. "Today, you can analyse sales and margins at a SKU or customer level, which gives you immense power in understanding where the opportunities and problems are. This granular detail can ultimately guide the whole organisation, from global strategy to local account managers."

At the recent M&A Forum, carve-outs were discussed during a special panel discussion in which Fabio Yamasaki took part. 

Carve-outs vs. acquisitions: Navigating the complexity gap
Carve-outs present distinct challenges that differentiate them from traditional acquisitions. "In terms of scope, full acquisitions require validating systems, processes, and basic assessment elements", Yamasaki explains. "With carve-outs, you must additionally focus on critical assets needed to run this business independently and ensure you're getting the necessary people, assets, and systems."

He identifies four areas that require special attention:

People: "You need to identify, retain, and recruit the people to run your business. In a full acquisition, the business is ready to run; in a carve-out, you need to create this environment."

Operations: "Services and entities entangled with the rest of the group need disentanglement. Preparation is key, unlike acquisitions, where you simply get the keys and start running."

Intellectual Property and Technology: "IT systems and intellectual property must be carefully separated and maintained."

Financials: How these operational factors "are reflected in the financials" becomes a critical consideration.

The greatest risk? "Separating from the seller and realising that you forgot some key assets or value that you cannot recover.”

The playbook for carve-out success
Given these complexities, what separates successful carve-out executions from failed ones? Fabio Yamasaki emphasises that executing a carve-out goes beyond signing the deal—it requires instilling operational discipline early. From day one post-close, stabilising the business and executing a focused 100-day plan make the difference. That includes ensuring standalone readiness, capturing early wins, and laying the groundwork for a long-term operational transformation. He suggests several critical practices:

Preparation is paramount: "Prepare, prepare, prepare. Ensuring you have a carve-out perimeter and a standalone plan well ahead of launching a process is most important."

Create a credible standalone story: "Build a very credible management story and standalone business that convinces buyers this is a business that makes sense, with a consistent financial sequence that integrates all aspects of the carve-out."

Establish clear ownership early: "There must be clear ownership between the investment team and operations team for the transactional part, integration, and value creation plan, aligned with management incentive plans that provide clear guidance on expectations."

Implement robust governance to support management in driving the business post-close. Micromanagement doesn’t work. What does work is setting clear targets, coaching consistently, and backing teams with the right governance. At exit, the goal is to leave behind a team that performs and grows on its own.

Learn from experiences: "We constantly compare our investment assumptions against post-close realities. This feedback loop allows us to be better prepared for the next acquisitions."

Operational excellence isn’t a buzzword—it’s a repeatable process. Carve-outs often inherit inefficient operations, so prioritising optimization, fast implementation, and efficiency can create tangible value fast.

The non-negotiable need for valuation discipline
Maintaining valuation discipline has become non-negotiable, especially with carve-outs where historical financials may not tell the full story. "You need to continue to have discipline. The valuation discipline is critical nowadays. We would rather walk away from a deal than overpay", Yamasaki asserts firmly.

This discipline requires specific approaches:

Focus on normalised performance: "Normalising earnings and cash flows forces you to understand the fundamentals of the business."
Prepare for multiple scenarios: "Scenario planning for A, B, C, D allows you to prepare for the best and worst cases, and understand the risks in terms of paybacks."

Quantify operational levers: “Assessing value creation depends not only on what a business is today, but on what operational improvements can realistically be delivered.”

The consequences of abandoned discipline can be severe. "I've seen well-respected investors overpaying in recent years, and many of these companies are now bankrupt. Price discipline is key in our current environment."

Beyond financial aspects, cultural integration plays a critical role in determining success—especially in cross-border deals. "Cultural misalignment is a soft characteristic, but can pose significant risk for integration", warns the carve-out investor. This becomes more complex in multi-jurisdictional deals where "different rules and standards apply to different countries, requiring particular attention in labour, environmental, and IP compliance matters."

Cultural assessment must begin during due diligence. "Culture drives execution post-close, and mismatching or underestimating it can delay or derail plans." This includes evaluating whether the existing leadership team is right for executing the intended plan, especially in businesses that lacked operational focus under prior ownership.

The future outlook: Where opportunity meets discipline
Looking ahead, Fabio sees a favourable outlook for carve-out opportunities, particularly in Europe. "I think we're coming from a very volatile period, particularly in Europe, where now inflation and interest rates are coming to levels that provide a more favourable outlook", he notes.

In Belgium specifically, he observes: "There's more and more demographic effect of succession-driven views, particularly in B2B and industrial sectors."

This combination of macroeconomic stabilisation and demographic shifts suggests carve-out opportunities will continue to emerge, providing fertile ground for investors with the right expertise and discipline.

Finding value when others see only risk
In a world defined by uncertainty, the ability to identify and unlock value in overlooked assets has become a crucial skill for M&A professionals. Carve-outs offer unique opportunities to acquire businesses with untapped potential, but only for those who bring both specialised expertise and unwavering discipline.

Finding hidden gems is only half the battle; acquiring them at the right price means little without the ability to execute a structured operational transformation. Embedding operational excellence early—through operations optimisation, lean processes, and commercial excellence—is often what separates value creation from value leakage..

Those who combine a sharp eye for opportunity with operational rigour and pricing discipline will consistently deliver outperformance. For those who master this balance of opportunity recognition and valuation discipline, carve-outs will continue to offer resilient and repeatable value creation possibilities, even in the most volatile of markets.