Equity Carve-Out

Definition:

An IPO undertaken by the parent company of a proportion of a subsidiary’s shares. In an Equity Carve-Out, the parent company remains the majority shareholder, with the minority stake held in public hands. In general, an Equity Carve-Out is a precursor to a full spin-off of a subsidiary. Because the Holding Company retains majority control, purchasing shares in the subsidiary may be less appealing to investors as they are less able to influence management.

Return to Glossary