Spin-off / Carve-out – On the right track for entrepreneurial action

Within large corporate entities, peripheral business units often grow into separate subsidiaries which then, in some cases, no longer fit in with the core business. Alternatively, a group might acquire a company and only wish to keep that part of it which fits its traditional core competencies. The consequence is the spin-off or carve-out and sale of the part of the business which does not fit, or the sale of the separate subsidiary. The management previously employed in the business unit concerned, or indeed external managers, then have the opportunity to take over the business unit (MBO / MBI) together with an equity capital partner such as HANNOVER Finanz and to establish it as an independent medium sized company.

In most cases, the equity company becomes the majority shareholder and also finances the acquisition of the shares by the management. HANNOVER Finanz has often set the course for entrepreneurial activity in this way and facilitated autonomous careers. Involvement by the equity partner and the further favourable development of the medium sized enterprise created in this way are above all dependent on a good growth forecast and a unique market position. Only in that way can a rise in value of the company be ensured in preparation for the shares to be sold on. At the end of the partnership with HANNOVER Finanz, there may be a complete takeover by the management, a sale of the shares to a further investment company or a sale to another company in the same or a related industry as a strategic move. In the over 35 years of its existence, HANNOVER Finanz has funded many spin-offs and carve-outs from large companies and successfully developed the resulting enterprises together with the management.

Examples of disengagement from a group with the support of HANNOVER Finanz include Schrack Technik International GmbH and RUNNERS POINT Warenhandelsgesellschaft mbH. Further examples can be found under Portfolio.