| Main Entry: | carve-out1 |
| Part of Speech: | n |
| Definition: | See carveout |
Carve-out
1. 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.
2. Where an established brick-and-mortar company hooks up with venture investors and a new management team to launch an Internet spinoff.
Investopedia Commentary
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."
Related Links
IPO Basics Tutorial
The Basics of Mergers and Acquisitions
See also: Spinoff, Split-off, Split-up
Also spelled: carve out, carveout, carvout