Upcoming Corporate Spin-Offs 2019-07-02T11:26:21-05:00

Upcoming Spin-Offs Calendar

Note: Please see below the calendar for commentary on each company.

Parent NameParent TickerSpin-Off NameSpin-Off TickerSpin-Off TypeAnticipated Spin DateResources
Twenty-First Century Fox
FOXAFOX Corporation
FOXA / FOX
Spin-OffClosed (Q119)
Research Report
DowDuPont
DWDPDowDOWSpin-OffClosed (Q219)
Research Report
NovartisNVSAlconALCSpin-OffClosed (Q219)Research Report
V.F. CorpVFCKontoor BrandsKTBSpin-OffClosed (Q219)Research Report
DowDuPont
DWDPCorteva Agriscience
CTVA
Spin-OffClosed (Q219)
Research Report
KAR Auction Services
KAR
Insurance Auto Auctions IAASpin-OffClosed (Q219)
Research Report
Post HoldingsPOSTActive NutritionTBDCarve-Out2H 2019Spin-Off Brief
Madison Square GardenMSGSports BusinessTBDSpin-Off2H 2019Spin-Off Brief
Nuance CommunicationsNUANAutomotive SegmentTBDSpin-Off2H 2019Spin-Off Brief
MallinckrodtMNKSpecialty GenericsTBDSpin-Off2H 2019Spin-Off Note
DanaherDHRDental SegmentTBDCarve-Out2H 2019Spin-Off Brief
Eaton CorporationETNLightingTBDSpin-OffQ4 2019Spin-Off Brief
The Ensign GroupENSGThe Pennant GroupPNTGSpin-OffQ4 2019Spin-Off Brief
Eagle MaterialsEXPTBDTBDSpin-Off1H 2020Spin-Off Brief
ArconicARNCTBDTBDSpin-Off1H 2020Spin-Off Brief
Ingersoll-RandIRIndustrial SegmentTBDSpin-Off1H 2020Spin-Off Brief
TiVo CorporationTIVOProduct SegmentTBDSpin-Off1H 2020Spin-Off Brief
AECOMACMManagement ServicesTBDSpin-Off2020Spin-Off Brief
United Technologies CorpUTXCarrierTBDSpin-Off2020Spin-Off Brief
United Technologies CorpUTXOtisTBDSpin-Off2020Spin-Off Brief
United Technologies CorpUTXAerospaceUTXRemainCo2020Spin-Off Brief
Tenneco
TEN
DRiV
TBD
Spin-Off2020
Spin-Off Brief
Ecolab Inc.ECLUpstream EnergyTBDSpin-Off2020Spin-Off Brief
The Gap, Inc.GPSOld NavyTBDSpin-Off2020Spin-Off Brief
General ElectricGEGE HealthcareTBDCarve-Out2020Spin-Off Brief
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Second Half 2019 Spin-Offs

The Madison Square Garden Company (Spinning off the Sports Business)

Madison Square Garden owns a variety of sports teams and venues (Madison Square Garden, Radio City Music Hall, etc.). In June 2018, they announced the plan to spin-off the Sports business into its own separate company. Its primary assets will be the professional sports franchises of the New York Knicks and Rangers. The new company could be very interesting because it will be one of the few pure-play, publicly traded sports franchises. The transaction is expected to close in the second half of 2019. Please see the MSG Spin-Off Brief (subscription required) for more information on the company and a discussion of why it could be interesting for investors.

Post Holdings (Carving out the Active Nutrition Segment)

Post Holdings is a consumer packaged goods holding company that has brands in a variety of different categories. In November 2018, they announced the plan to carve-out the Active Nutrition segment (PowerBar, Dymatize, etc.) through an IPO of just under 20% of the business. Post has been aggressively managed since spinning off from Ralcorp in 2012. They have done over a dozen acquisitions, driving revenue from under $1 billion to over $6.2 billion, which has put significant leverage on the balance sheet. The carve-out is expected to close in the second half of 2019. For more information on the company’s history, management’s background, and the plan for the new company, please see the POST Spin-Off Brief (subscription required).

Danaher (Carving out the Dental Business)

Danaher produces a wide variety of medical, industrial, and commercial products. In July 2018, they announced the plan to separate off the dental segment. The dental business produces products to diagnose, treat, and prevent disease and ailments of the teeth, gums, and supporting bones. The business has been built up over time through the acquisitions of KaVo (2004), Gendex (2004), Sybron Dental Specialties (2006), PaloDEx Group Oy (2009), and Nobel Biocare (2014). Management initially expected the separation to be structured as a spin-off with a pro forma distribution to DHR shareholders, but they now expect to carve-out the business through an IPO to raise capital to finance the acquisition of the BioPharma business from GE Life Sciences.

The Dental segment has struggled to grow in recent years with core sales volumes of traditional dental equipment and consumables declining in developed markets. Management is trying to rejuvenate the segment through increased R&D investments in new technologies. The transaction is expected to be completed in the second half of 2019. You can learn more about the company, pro forma financial profile, and potential investment opportunity in the DHR Spin-Off Brief (subscription required).

Nuance Communications (Spinning off the Automotive Segment)

Nuance Communications is a leading provider of voice recognition and natural language understanding solutions (their technology is behind Apple’s Siri). In November 2018, they announced the plan to spin-off the Automotive segment. This business provides auto manufacturers and suppliers with virtual assistants and connected services for cars. Nuance has gone through a lot of changes to the business and management team over the last couple of years. With the previously executed portfolio moves in addition to the automotive spin-off, which is expected to close in the second half of 2019, the company will look much different going forward. To learn more about all the changes at the company and the potential opportunity for investors, please see the NUAN Spin-Off Brief (subscription required).

Eaton Corporation (Spinning off the Lighting Business)

Eaton is a large power management company that generated over $21 billion in revenue in 2018. At the company’s investor day on March 1, 2019, they announced the plan to spin-off the Lighting business. The lighting segment sits within the larger Electrical Products segment and produces lighting, controls, and sensor networks to improve efficiency and save costs for industrial, commercial, residential, and electric utility customers. This move is consistent with other moves the management team has made over the last few years to shift Eaton’s business portfolio. The spin-off is expected to close in the second half of 2019. Please see the ETN Spin-Off Brief (subscription required) to learn more about the portfolio moves at Eaton, the pro forma financial profile, and the opportunity for investors.

The Ensign Group (Spinning off The Pennant Group)

Ensign provides post-acute care health care services which include a broad spectrum of skilled nursing, assisted living, home health and hospice, and other ancillary services. They generated over $2 billion of revenue in 2018. On May 6, 2019, they announced the plan to spin-off the home health and hospice agencies and substantially of the senior living businesses into a new company called The Pennant Group. The company plans on executing a similar strategy of decentralized operations and M&A that has historically worked well for Ensign. The spin-off is expected to close in the fourth quarter of 2019. For more information on the transaction, company culture, and historical capital allocation decisions please see the ENSG Spin-Off Brief (subscription required).

2020 Spin-Offs (Exact Timing TBD)

Eagle Materials (Separating Heavy and Light Materials)

Eagle Materials is a supplier of heavy construction materials, light building materials, and materials used for oil and natural gas extraction. On May 30, 2019, they announced the plan to separate the Heavy Materials and Light Materials businesses into two independent companies (the SpinCo and RemainCo will be determined at a later date). In addition to the separation, they announced that they are pursuing alternatives for the Oil & Gas Proppants business. You can learn more about Eagle’s business and the investment situation in the EXP Spin-Off Brief (subscription required).

Arconic (Splitting into Two)

Arconic is a large metals engineering and manufacturing company serving a wide range of end markets, including aerospace, automotive, commercial transportation, packaging, building and construction, and oil and gas. In February 2019, they announced the plan to separate into two different companies: Engineered Products & Forgings and Global Rolled Products (the SpinCo and RemainCo will be determined at a later date). Post-spin-off, these two separate companies will have very different operating profiles and business strategies. Please see the ARNC Spin-Off Brief (subscription required) to learn more about everything that’s happened since the 2016 Alcoa spin-off, the pro forma financials, and the potential opportunity for investors.

Ecolab (Spinning off Upstream Energy)

Ecolab is a global specialty chemical and services company with core operations in the sanitization and cleaning industry. In February 2019, they announced the plan to spin-off the Upstream Energy business. This business produces chemicals for the cementing, drilling, fracturing and acidizing phases of well drilling and stimulation. Ecolab originally got into these businesses through the 2011 acquisition of Nalco and the 2013 acquisition of Champion Technologies. They expect the spin-off to close sometime in mid-2020. You can learn more about Ecolab’s business model and the investment situation in the ECL Spin-Off Brief (subscription required).

Ingersoll-Rand (Spinning off Industrial Segment)

Ingersoll-Rand is a diversified industrial company that focuses on products and services to improve the quality and comfort of air in homes and buildings, transport food and perishables, and increase industrial productivity and efficiency. In the Climate business, they have leading market positions in HVAC systems with the Trane and American Standard brands, as well as in transportation refrigeration with the Thermo King brand. In the Industrial business, they have strong positions in compressed air and gas systems, as well as power tools and fluid management systems.

On April 30th, they announced the plan to spin-off and merge the industrial segment with Gardner Denver through a Reverse Morris Trust transaction. This new company will operate under the Ingersoll-Rand name. The combined company will be 50.1% owned by existing Ingersoll- Rand shareholders and 49.9% owned by Gardner Denver shareholders. Ingersoll-Rand’s remaining Climate segment will take a new name and be a pure-play HVAC and refrigeration company. The transaction is expected to close in early 2020.

Please see the IR Spin-Off Brief (subscription required) to learn more about the transaction and the company’s strategy.

Tenneco (Spinning off the Aftermarket & Ride Performance Segment)

Tenneco is a global automotive supplier that recently merged with Federal-Mogul. They expect to combine these two companies together, generate significant cost synergies, and then spin-off the Aftermarket and Ride Performance Company. The new company, to be named DriV, will be comprised of Federal-Mogul’s Motorparts segment and Tenneco’s Ride Performance segment. For more information on the transaction, please see the TEN Spin-Off Brief (subscription required).

AECOM (Spinning off the Management Services Segment)

AECOM provides planning, design, engineering, and construction services for governments and private sector clients in transportation, facilities, environmental, energy, water, and government end markets. On June 17, 2019, they announced the plan to separate the Management Services segment through a spin-off. AECOM will retain the engineering & construction and planning businesses.

The Management Services segment is a major contractor to the U.S. federal government, particularly the departments of Defense and Energy. They manage a wide variety of projects, spanning from the operation and maintenance of military bases and the deactivation and disposal of nuclear waste to logistics and training programs. The transaction is expected to close in 2020.

Soon after management announced the spin-off, Starboard Value released an open letter to the board. The letter discusses AECOM’s operational shortfalls relative to peers, discounted valuation, and pushes the company to pursue a strategic review. To learn more about the business, investment situation, and potential opportunity, please see the AECOM Spin-Off Brief (subscription required).

TiVo Corporation (Spinning off the Product Segment)

TiVo provides technology that powers content discovery platforms (interactive programming guides, digital video recorders, voice and text search, etc.) for large cable and satellite companies, as well as OTT content providers. On May 9th, 2019, they announced the plan to spin-off the Product segment. This business provides a suite of technologies that can be integrated into any of their customers’ internally developed platforms. The RemainCo will be comprised of patent portfolios that generate licensing revenue from traditional and new media video providers for use of their intellectual property. The spin-off is expected to close in the first half of 2020. For more information on the transaction, changing industry dynamics, and investment situation please see the TIVO Spin-Off Brief (subscription required).

United Technologies (Spinning off Carrier)

United Technologies is a global industrial conglomerate that generated over $66 billion in revenue in 2018. They provide products and services to the building systems and aerospace industries worldwide. In November 2018, they announced the plan to separate into three different companies:

  • Remaining UTX (Aerospace)
  • Carrier
  • Otis

Carrier is a leading provider of heating, ventilation, air conditioning (HVAC); refrigeration; fire; security; and building automation products. This segment has very different business drivers and economics than UTX’s other businesses. Please see the UTX Spin-Off Brief (subscription required) for additional details on the business, investment opportunity, and pro forma financial profile.

United Technologies (Spinning off Otis)

United Technologies is a global industrial conglomerate that generated over $66 billion in revenue in 2018. They provide products and services to the building systems and aerospace industries worldwide. In November 2018, they announced the plan to separate into three different companies:

  • Remaining UTX (Aerospace)
  • Carrier
  • Otis

Otis is the world’s leading manufacturer of elevators, escalators, and moving walkways. Importantly, they also have the largest aftermarket services portfolio of any elevator manufacturer with more than two million elevators under maintenance. This segment has very different business drivers and economics than UTX’s other businesses. Please see the UTX Spin-Off Brief (subscription required) for additional details on the business, investment opportunity, and pro forma financial profile.

The Gap (Spinning off Old Navy)

The Gap, Inc. is a U.S. based retailer offering clothes, accessories, and personal care products for men, women, and children. In February 2019, they announced the plan to split the company into two. One company will be comprised of the Old Navy Brand and the other company will consist of the Gap, Banana Republic, and Other (mainly Athleta and Intermix) brands.

The company has struggled in recent years with Old Navy being the company’s lone bright spot. To learn more about the company’s struggles, management’s rationale for the transaction, and the investment situation, please see the GPS Spin-Off Brief (subscription required).

General Electric (Carving out the Healthcare Segment)

General Electric is a global industrial company that produces everything from aircraft engines to medical imaging products. In June 2018, they announced the plan to carve-out the Healthcare segment through an IPO. The healthcare business produces technologies for medical imaging, patient monitoring and diagnostics, drug discovery, and biopharmaceutical manufacturing as well as other applications. While the transaction was originally expected to close in the second half of 2019, it is now expected to close sometime in 2020 due to the sale of the BioPharma business to Danaher.

GE’s previous downfall and current turnaround plan under new CEO Larry Culp has been well documented. The Healthcare carve-out should be another step in simplifying the business and stabilizing GE. Please see the GE Healthcare Spin-Off Brief (subscription required) to learn more about the Healthcare business and investment situation.

Note: Here is the list of recent corporate spin-offs

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