Subsidiary Spin-Offs with Griffin Enterprises

From pure spin-offs to partial, Griffin can assist your corporate spin off to leverage different growth strategies, incentivize management and lower cost of capital

Subsidiary Spin-Offs

Griffin is well practiced in utilizing the subsidiary spin-off technique ito assist companies in going public.

A subsidiars Spin-off is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. There are many reasons to complete a spin-off ; some common reasons are:

  • Equity financing
  • Regulatory relief
  • Debt financing
  • Separate profit centers increasing shareholder value

According to the SEC website:

In a “spin-off,” a parent company distributes shares of a subsidiary to the parent company’s shareholders. The shares are usually distributed on a pro rata basis and the subsidiary becomes a separate company. State law and the rules of the stock exchanges determine whether a company must seek shareholder approval for a spin-off.

A subsidiary does not have to register the shares of the spin-off under the Securities if it meets certain conditions. One of the conditions requires the parent company to provide adequate information about the spin-off to its shareholders and the trading markets. But when registration is required, the subsidiary must file a registration statement with the SEC. In these situations, the SEC’s Division of Corporation Finance may examine the registration statement to determine whether it complies with our disclosure requirements. Please note, however, the SEC does not evaluate the merits of the spin-off, nor do we determine if the securities offered are “good” investments. For more information about spin-offs, please read the SEC’s Division of Corporation Finance staff legal bulletin.

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