# Carve-Out

*Corporate Finance & M&A — Finicade finance glossary*

A carve-out sells a minority stake in a subsidiary to outside investors, often through an IPO, while the parent keeps control. It raises cash and establishes a public market price for a division the market may have been undervaluing inside the group. Carve-outs are operationally hard: separating shared systems, contracts and staff is the part that consistently takes longer than planned.

**Also known as:** equity carve-out, corporate carve out

**Related terms:** [Spin-Off](https://finicade.com/glossary/spin-off), [Divestiture](https://finicade.com/glossary/divestiture), [Sum-of-the-Parts Valuation](https://finicade.com/glossary/sum-of-the-parts-valuation), [IPO (Initial Public Offering)](https://finicade.com/glossary/ipo), [Post-Merger Integration](https://finicade.com/glossary/post-merger-integration)

Source: https://finicade.com/glossary/carve-out