IPO University
Carve-Out
A specific type of spin-off in which the corporate parent consolidates a particular line of business and then sells that newly created subsidiary to investors (e.g. AXA SA combining its US operations into one subsidiary, AXA Equitable). In essence, the company is "carving out" a piece of its business with a specific business focus and selling it to the public to highlight the value of niche business operations within the larger company. Usually done in the form of a true spin-off with an independent board and separate financial statements, but heavy cross ownership by parent. Sometimes done in the form of a tracking stock structure (e.g. AT&T Wireless).
