As a result of the spin-off, the parent company sells a portion of its shares in its subsidiary to the public through an initial public offering (IPO), effectively turning the subsidiary into a stand-alone company.
Since the shares are sold to the public, the spin-off also creates a new shareholder structure for the subsidiary.
The spin-off allows the company to benefit from a business segment that may not be part of its core business, as it still retains an interest in the subsidiary.
A spin-off is similar to a spin-off, however a spin-off occurs when the parent company transfers shares to existing shareholders rather than new ones.
Acquisition premium is the difference between the estimated real value of a company and the actual price paid for its acquisition in an M&A transaction.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
Back integration is when a company expands its role to perform tasks that were previously performed by enterprises located higher up in the supply chain.
Share capital is the number of ordinary and preferred shares that the company has the right to issue and which are accounted for on the balance sheet as part of share capital.