Carve-Out IPOs Repairing Balance Sheets

A growing number of companies are turning towards their subsidiaries to help them bail out their struggling balance sheets. With their options limited, we are seeing an increasing number of firms favouring so-called 'carve out' deals, where companies raise cash by divesting equity stakes in their subsidiaries. While, CFW has already identified this trend, in terms of firms and institutional investors acquiring stakes in spun-off units (see 'PE A Rising Force In Corporate Carve-Outs', CFW, October 23 2009), we are now also seeing a large number of companies listing subsidiaries.

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