Comparative law notes
"A spin out is a type of corporate realignment involving the separation of unit(s) or division(s) to form a new independent corporation. The spin out company takes with it the operations of the segment and associated assets and liabilities. The parent company is required by the SEC to detail the spin out in Form 10-12B, which contains a substantial information letter or narrative that outlines the rationale for the spin out, strengths and weaknesses of the new company, and the outlook of its industry. Two reasons for spin-out: First, it is a way to unlock the value of an embedded division, which might be traveling a different growth arc than the overall company. Usually, this 'trapped' or constrained segment is growing faster than its parent and would be better off as an independent company. Second, the spin out allows the parent company to focus on its core operations without the diversion of resources to a segment that could have different needs in various aspects."