The situation: A large healthcare company made a decision to spin-off its sizable medical equipment business as a separate public company.
The challenges: How should “NewCo” be introduced and appropriately positioned within the investment community? How should “RemainCo” be repositioned with existing shareholders, while cultivating new ones? On which Stock Exchange should each company list? How can each company ensure sell-side research analyst estimates are updated at the time of spinoff? How should a cross-functional team operate in creating and reviewing documents such as U.S. Securities Exchange Commission filings? How should RemainCo’s IR department be rebuilt, and what should NewCo’s IR function look like?
The result: We worked to create NewCo and RemainCo IR functions, including hiring staff for NewCo. We conducted a thorough analysis of Stock Exchange listing requirements and perception to match the investor profile of each company. We engaged market surveillance firms to help identify potential investors for NewCo through focused targeting. We used a substantial investor perception study to appropriately reposition RemainCo’s capital deployment strategy, to retain existing investors and win new income-focused investors. NewCo’s successful spinoff, and RemainCo’s relative share price stability, validated our successful overall approach.
