Carve-Out

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Dictionary Says

Definition of 'Carve-Out'

Sometimes known as a partial spinoff, a carve out occurs when a parent company sells a minority (usually 20% or less) stake in a subsidiary for an IPO or rights offering.

Also, when an established brick-and-mortar company hooks up with venture investors and a new management team to launch an Internet spinoff.



Investopedia Says

Investopedia explains 'Carve-Out'

In most cases the parent company will spinoff the remaining interests to existing shareholders at a later date when the stock price is much higher.

Also known as a "carveout" or an "equity carve out."

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