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Tickers in this Article: BCO, CFL, TREE, IACI, TKTM, IILG, HSNI
While some investors may have thought the price of Brink's Co. (NYSE:BCO) dropped 35% on November 3, the company actually completed the spinoff of its Brink's Home Security Holdings (NYSE:CFL) division, leaving shareholders with ownership of both companies.

Brink's is a security services company with two divisions. Brink's Home Security services and monitors alarms in more than 1 million residential and commercial locations. Its customer base is 90% residential, and this business had $484 million in revenues in 2007.

The second division, which is called Brink's Inc., transports cash and valuables both long and short distances and manages automated teller machines. The company is also involved in "cash logistics" or the sorting, wrapping and counting of currency for cash-intensive businesses.

Pressured By Shareholders
Brinks decided in February to spin off the home security division to shareholders. The company did this under pressure from MMI Investments and Steel Partners II, two large activist shareholders. MMI Investments said in a filing earlier this year that management attitude "reflects an abdication of the role of corporate development and strategic configuration in shareholder value creation, as evidenced in the company's inaction over the past several years despite robust levels of strategic activity in its industry. This is due, in our opinion, to two substantial deficits in the skill set and experience of the company's board of directors as currently composed: Wall Street acumen and security industry expertise." MMI held 8.4% of Brink's stock at the time. (Shareholders are getting a bigger say in how companies are run. Find out how you can be heard in How Your Vote Can Change Corporate Policy. Or, check out Could Your Company Be A Target For Activist Investors?)

The new company trades on the NYSE, and existing shareholders of the old Brink's received one share of the new company for every one held.

October 31 was the last day the companies traded together. Brink's closed that day at $48.49 and opened the next trading day at $27.03. Brink's Home Security Holdings, which had been trading on a "when issued" basis since October 17, opened at $21.95.

Jury Still Out
So, has the spinoff created "shareholder value"? It's too early to tell, even in the short-term world of Wall Street. Brink's Home Security Holdings and Brink's closed on November 12 at $14.49 and $21.10, respectively. The combined price of $35.59 is clearly lower than the $48.49 the one company closed at on October 31, but much has happened since then in the economic outlook.

Another high-profile spinoff during the year was IAC/InterActiveCorp (Nasdaq:IACI), which spun off several of its businesses into four separate companies in August. The companies are Ticketmaster Entertainment (Nasdaq:TKTM), HSN (Home Shopping Network) (Nasdaq:HSNI), Interval Leisure Group (Nasdaq:IILG) and Tree.com (Nasdaq:TREE).

The spinoff at Brink's so far has given shareholders one share of each company with no increase in shareholder value, but it's too early to make a final judgment on the action.

Companies use M&As and spinoffs to boost profits - learn how you can do the same in Cashing In On Corporate Restructuring.

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