A divisional buyout or carveout, in finance, is a transaction in which a corporate division, business unit, or subsidiary is acquired using the same financial structuring as a leveraged buyout. Typically, in these transactions, the financial sponsor will turn the acquired business into a standalone company, necessitating the creation of certain functions that were formerly provided by the parent company.
A D-RLBO is a leveraged buyout of a division or subsidiary that subsequently comes to trade on the public markets. From the point of view of a divesting firm, the D-RLBO permits the sale of a subsidiary to its management and/or private investors who subsequently restructure its assets and capital structure to enhance overall firm value.
Avon Products Inc. provides an example. Avon divested specialty jeweler Tiffany & Co. to private equity investors who subsequently accomplished an initial public offering (IPO).
{{Navbox
| name = Private equity and venture capital
| state = autocollapse | title = [[Finance:Private equitPrivate equity and venture capital
| image = | bodyclass = hlist
| group1 = Basic investment types | list1 =
| group2 = History | list2 =
| group3 = Terms and concepts
| list3 =
Buyout | |
---|---|
Venture | |
Structure |
| group4 = Investors | list4 =
| group5 = Related financial terms | list5 =
| below =
}}
Original source: https://en.wikipedia.org/wiki/Divisional buyout.
Read more |