A carve-out is a transaction in which a parent company separates a business unit and sells a partial or complete interest — often used in restructuring to monetize non-core assets without selling the entire company.
At CRAGSI, we define a carve-out as a transaction in which a parent company separates a business unit, division, or subsidiary from its corporate structure and sells a partial or complete interest to third-party investors. Carve-outs allow a distressed parent to monetize non-core or underperforming assets without selling the entire company — generating cash to pay down debt, fund operations, or return capital to shareholders.
Carve-outs take many forms: selling a minority interest in a subsidiary, selling a majority interest to a strategic or financial buyer, or taking the subsidiary public through an IPO. Each approach requires careful attention to operational separation (how shared services, contracts, and employees will be divided), tax planning (carve-outs can generate significant liabilities if not properly structured), and regulatory compliance.
At CRAGSI, we advise on carve-outs from both the seller's and buyer's perspectives, helping clients navigate the operational, financial, and legal complexities of separation.
Related CRAGSI services: Asset Dispositions · Exit Event Strategies