Carve out is sometimes referred to as a partial spinoff, it involves the partial sale of interest in a subsidiary of a larger company, while it still maintains a controlling interest in the subsidiary. Generally, the larger entity is known as a parent company, while the subsidiary is referred to as a child company. When a carve-out takes place, the parent company continues to function according to the usual pattern, while there are some slight changes that are usually made in the operation of the child company.
Selling off a minority share in the child company
With the issue of an IPO the process of selling off a minority share in the child company is often accomplished. The means for a fixed number of the shares of the child company to be offered for public sale is provided by the IPO, or initial public offering.
