What Is a Spinout? A spinout is a type of corporate realignment involving the separation of a division to form a new independent corporation. The spinout company takes with it the operations of the segment and associated assets and liabilities.

What spin out means?

If you spin something out, you make it last longer than it normally would. My wife's lawyer was anxious to spin things out for as long as possible.

What is a spin off startup?

Spin-offs and start-ups can be growth opportunities for companies with strong core businesses because they create new revenue streams. … In strictly financial terms, a spin-off is a formal split of a company into two or more separate entities, while a start-up is a new brand entity created by an existing company.

What is an example of a spin off industry?

Spin-offs occur when the equity owners of the parent company receive equity stakes in the newly spun off company. For example, when Agilent Technologies was spun off from Hewlett-Packard in 1999, the stock holders of HP received Agilent stock.

Why do companies spin out?

Why Would a Company Initiate a Spinoff? The main reason for a spinoff is that the parent company expects that it will be lucrative to do so. Spinoffs tend to increase returns for shareholders because the newly independent companies can better focus on their specific products or services.

What is a stock spinoff?

In a "spin-off," a parent company distributes shares of a subsidiary to the parent company's shareholders so that the subsidiary becomes a separate, independent company. The shares are usually distributed on a pro rata basis.

Who are spin-off entrepreneur?

A spinoff is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business.

How do stock spinoffs work?

In a "spin-off," a parent company distributes shares of a subsidiary to the parent company's shareholders so that the subsidiary becomes a separate, independent company. The shares are usually distributed on a pro rata basis.