An initial public offering (IPO)/ initial public sale of a minority interest (e.g., 20% or less) in the equity (stock) of a subsidiary or division by the parent entity. The parent spins off the remaining shares to its existing stockholders at a certain future date. Split-off IPO allows an entity to fully divest its interests, usually over the course of many years, and receive monetary amounts for the shares it sells at the present.
Split-off IPO is a type of corporate reorganization, whereby an entity creates a new subsidiary and subsequently offers its equity stock for sale in an IPO, while retaining management control.
It is also known as a carve-out or an equity carve-out.
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