Spin-off

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Spin-off

A company can create an independent company from an existing part of the company by selling or distributing new shares in the so-called spin-off.

Spin-Off

A situation in which a company offers stock in one of its wholly-owned subsidiaries or dependent divisions such that subsidiary or division becomes an independent company. The parent company may or may not maintain a portion of ownership in the newly spun-off company. A company may conduct a spin-off for any number of reasons. For example, it may wish to divest itself of one industry so it can expand into another. It may also simply wish to profit from the sale of the subsidiary. A spin off should not be confused with a split off.

Spin-off.

In a spin-off, a company sets up one of its existing subsidiaries or divisions as a separate company.

Shareholders of the parent company receive stock in the new company based on an evaluation established for the new entity. In addition, they continue to hold stock in the parent company.

The motives for spin-offs vary. A company may want to refocus its core businesses, shedding those that it sees as unrelated. Or it may want to set up a company to capitalize on investor interest.

In other cases, a corporation may face regulatory hurdles in expanding its business and spin off a unit to be in compliance. Sometimes, a group of employees will assume control of the new entity through a buyout, an employee stock ownership plan (ESOP), or as the result of negotiation.

References in periodicals archive ?
The militant group Hamas is an offshoot in the Palestinian territories.
In Jordan, reformists in the group's offshoot, led by Ruhail Gharaybeh and Nabil Koufahi, call for a constitutional monarchy in the kingdom and urge the group to join ranks with other groups in one comprehensive political reform program," he wrote in AL HAYAT.
ACROBATIC and kinetic as sparking severed power lines, clowning and its offshoot dance movement krumping are unbelievably engaging movie subjects.
The boutique offshoots of the Poway-based computer manufacturer will soon boast consumer electronics alongside its traditional computer and monitor lineup.
Voegli says that while there are several ``Star Wars'' offshoots from toys to other audiotapes, Lucas considers the movies and radio dramas the official ``Star Wars'' canon.
All three, as well as ``Star Wars'' offshoot series, are available on CD or cassette from Highbridge (800-755-8532), as well as from local bookstores.
There are already two renegade offshoots, Slamdance and Slumdance, prepared to cope with the overflow.