carve-out

Carve-out

1. Sometimes known as a partial spinoff, a carve out occurs when a parent company sells a minority (usually 20% or less) stake in a subsidiary for an IPO or rights offering.

2. Where an established brick-and-mortar company hooks up with venture investors and a new management team to launch an Internet spinoff.

Notes:

In most cases the parent company will spinoff the remaining interests to existing shareholders at a later date when the stock price is much higher.

Also known as a "carveout" or an "equity carve out."

See also: Spinoff, Split-off, Split-up

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carve-out

See equity carve-out.