Corporate Restructuring
Corporate restructuring refers to transactions that change a firm’s ownership structure, asset boundaries, or capital allocation, often by separating business units into distinct entities.
- A carve-out is when a parent firm sells a minority equity stake in a subsidiary to outside investors, typically through an IPO, while the parent usually retains control and a majority ownership stake.
- A spin-off is when a parent firm distributes shares of a subsidiary it owns to the parent’s existing shareholders, creating a separately traded company and reducing or eliminating the parent’s ownership stake without selling the shares for cash.