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Challenging accounting issues can arise when acquiring carve-outs. Carve-out entities need a clear understanding of what their new stand-alone status means in terms of numerous accounting concepts and they must establish accounting policies in line with their operations.
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The transaction creates two separate legal entities, the parent and the daughter company, each with its own board, management team, CEO, and financials. Equity carve-outs increase the access to
75:
In equity carve-out, the firm sells shares of the divested subsidiary to the public and retains a portion, which is often significant and represents controlling ownership of the subsidiary.
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If the parent company wants to fully divest the subsidiary, then an equity carve-out allows a prior evaluation of the subsidiary's market value and creates a credible transaction history.
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48:. Only part of the shares are offered to the public, so the parent company retains an equity stake in the subsidiary. Typically, up to 20% of subsidiary shares is offered to the public.
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60:, giving the carved-out subsidiary strong growth opportunities, while avoiding the negative signaling associated with a
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Pham, Dung (June); Nguyen, Thanh; Pham, Trang Minh; Adhikari, Hari (2020-03-14).
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EQUITY CARVE-OUT (ECO)AS A FINANCIAL INSTRUMENT FOR CORPORATE RESTRUCTURING
40:, is a type of corporate reorganization, in which a company creates a new
620:
515:
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152:"Corporate Divestiture Decisions and Long-Run Performance"
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489:
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249:Equity carve-outs in favour across power companies
199:"An Accounting Focus can Enhance Carve-out Values"
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44:and subsequently IPOs it, while retaining
114:"equity carve-out - Business Definition"
105:
7:
14:
116:. Your Dictionary. Archived from
869:
859:
244:The Pricing of Equity Carve-Outs
139:Investment Dictionary: Carve-out
16:Type of corporate reorganization
656:Debtor-in-possession financing
1:
168:10.1080/15427560.2020.1735389
156:Journal of Behavioral Finance
596:Staggered board of directors
64:(SEO) of the parent equity.
713:Accretion/dilution analysis
197:Bell, Dean; Benard, Tracy.
917:
676:Leveraged recapitalization
855:
847:Valuation using multiples
832:Sum-of-the-parts analysis
802:Modigliani–Miller theorem
661:Dividend recapitalization
476:Secondary market offering
901:Mergers and acquisitions
865:List of investment banks
780:Free cash flow to equity
606:Super-majority amendment
531:Management due diligence
471:Seasoned equity offering
896:Initial public offering
576:Shareholder rights plan
566:Post-merger integration
536:Managerial entrenchment
506:Contingent value rights
446:Initial public offering
718:Adjusted present value
581:Special-purpose entity
419:Direct public offering
389:At-the-market offering
733:Conglomerate discount
120:on September 17, 2013
755:Economic value added
750:Discounted cash flow
203:Transaction Advisors
340:Senior secured debt
26:), also known as a
875:Outline of finance
787:Market value added
770:Financial modeling
728:Business valuation
651:Debt restructuring
429:Follow-on offering
414:Corporate spin-off
372:(terms/conditions)
289:investment banking
46:management control
883:
882:
807:Net present value
792:Minority interest
723:Associate company
699:
698:
666:Financial sponsor
586:Special situation
556:Pre-emption right
546:Minority discount
456:Private placement
355:Subordinated debt
310:Exchangeable debt
297:Capital structure
285:Corporate finance
62:seasoned offering
908:
873:
872:
863:
862:
765:Fairness opinion
760:Enterprise value
743:Weighted average
671:Leveraged buyout
526:Drag-along right
424:Equity carve-out
381:Equity offerings
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345:Shareholder loan
330:Second lien debt
325:Preferred equity
305:Convertible debt
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213:. Archived from
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20:Equity carve-out
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827:Stock valuation
822:Residual income
738:Cost of capital
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691:Project finance
681:High-yield debt
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616:Tag-along right
541:Mandatory offer
511:Control premium
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461:Public offering
409:Bought out deal
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842:Terminal value
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686:Private equity
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315:Mezzanine debt
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233:External links
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162:(2): 126–140.
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94:Tracking stock
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394:Book building
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217:on 2016-03-04
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817:Real options
633:Tender offer
493:acquisitions
481:Underwriting
466:Rights issue
423:
369:Transactions
219:. Retrieved
215:the original
202:
192:
159:
155:
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134:
124:September 1,
122:. Retrieved
118:the original
108:
82:
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55:
34:
27:
23:
19:
18:
591:Squeeze-out
561:Proxy fight
491:Mergers and
404:Bought deal
335:Senior debt
890:Categories
837:Tax shield
797:Mismarking
601:Stock swap
551:Pitch book
521:Divestment
399:Bookrunner
320:Pari passu
221:2015-11-03
100:References
79:Challenges
68:Advantages
42:subsidiary
28:split-off
812:Pure play
705:Valuation
571:Sell side
434:Greenshoe
211:2329-9134
184:216462707
176:1542-7560
643:Leverage
621:Takeover
516:Demerger
501:Buy side
88:See also
52:Entities
37:spin-off
35:partial
626:Reverse
611:Synergy
451:Pre-IPO
439:Reverse
360:Warrant
209:
182:
174:
350:Stock
180:S2CID
33:or a
287:and
207:ISSN
172:ISSN
126:2013
164:doi
30:IPO
24:ECO
892::
205:.
201:.
178:.
170:.
160:22
158:.
154:.
277:e
270:t
263:v
224:.
186:.
166::
128:.
22:(
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.