Verecloud, Inc. (VCLD)

[©PROPHETABLE]

?2.?Spin-offs:
Spin- offs are similar to equity carve-outs in that they involve an equity issuance and a new firm is created. However, the parent firm does not receive cash in the transaction because the new shares are distributed to the existing shareholders as a pro rata dividend. This implies that the shareholders of the new independent firm will be the same as the shareholder of the parent firm (this is not the case in equity-carve-outs). These are usually tax-free transactions (if the parent firm distributes at least 80% of the shares of the subsidiary), thus the parent firm does not control the subsidiary being spun-off.
?These transactions also create value to shareholders. The reasons of the wealth creation might be the same as in the case of an equity-carve-out. The difference is that the parent firm does not receive financing in the transaction.
https://faculty.unlv.edu/mantecon/Fin405/Divestitures.doc