Equity Carve Out
The act or process of a company making an IPO on one of its subsidies without fully spinning off. During an equity carve-out, the parent company becomes majority shareholder and only offers a minority share to the market. This gives the subsidiary a degree of autonomy (such as its own board of directors) while still retaining access to resources at the parent company. Most of the time, an equity carve-out ultimately results in the parent company fully spinning off the subsidy. It is also called a partial spin off.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Distribution to stockholders or sale to the public of shares that represent a minority interest in a firm's subsidiary. A firm may undertake a partial spinoff when it considers the subsidiary is not properly valued by the public as part of the parent firm, or when it wishes to raise funds without giving up total control of the subsidiary.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.