What is a Carve-Out?
Sometimes called a partial spinoff, a carve-out involves the partial sale of interest in a subsidiary of a larger company, while still maintaining a controlling interest in the subsidiary. Generally, the larger entity is referred to as a parent company, while the subsidiary is identified as a child company. When a carve-out occurs, the parent company continues to function according to the usual pattern, while some slight changes are usually involved in the operation of the child company. The process of selling off a minority share in the child company is often accomplished with the issue of an IPO. The IPO, or initial public offering, provides the means for a fixed number of the shares of the child company to be offered for public sale. By controlling the sale of the shares, it is possible to ensure that controlling interest in the company is retained. This means the child company will still have the benefit of the resources of the parent, although the carve-out often does create a reo
A carve-out is an alternative to the dispute resolution procedures in the state workers compensation system. A carve-out is created through a collective bargaining agreement. The goals of a carve-out may include: • Improve safety programs and have fewer injury and illness claims. • Increase access to quality medical providers and medical evaluators. • Lower costs of medical care. • Reduce disputes. • Improve collaboration between unions and employers. • Increase satisfaction of all parties. • Provide the opportunity for continuous improvement by renegotiating the terms of the carve-out on an as-needed basis.
