Actionable Ideas for Companies and Sponsors

Carve-Out IPOs to Unlock Value or Monetize Non-Core Assets

Carve-out IPOs are the first monetization step in a company’s multi-step sell-down or spin-off strategy, and are part of a broader strategic dialogue around unlocking value that can also include the outright sale or 100% spin-off of the carved-out business.

Carve-out IPOs have been used to: 1) unlock sum-of-the-parts value for fast-growing segments/subsidiaries—e.g., CyrusOne (data center REIT) IPO out of Cincinnati Bell (announced); 2) monetize non-core assets—e.g., E2open IPO sell-down by Seagate (completed), and Synacor IPO sell-down by Intel Corp. (completed); and 3) create new drop-down vehicles to repay debt or finance capital expenditures—e.g., Rentech Nitrogen Partners MLP IPO out of Rentech (completed) and Susser Petroleum Partners IPO out of Susser Holdings Corporation (completed).