Number of IPO spin-offs doubled in US between 2023 and 2024
Stepping back from the constant stream of tariff news, this week I wanted to talk about a broader capital markets trend that has involved a good number of you in IR over the last few years: the growing number of corporate spin-offs.
In recent times, companies have increasingly looked to simplify their structures to unlock shareholder value. Many of the largest conglomerates have already broken up, such as GE, which last year completed its division into three separate entities covering aerospace, energy and healthcare. Honeywell, meanwhile, recently announced its own three-way split of the $125 bn industrial giant.
The trend has created a mix of challenges and opportunities for the IR industry. On the former, break-ups are often triggered by activist pressure (either actual or expected), creating complicated and high-pressure scenarios for IR to manage.
On the latter, spin-offs have helped boost the number of public companies at a time when IPOs are still finding their feet. In addition, they offer the chance for IR to show its value, as effective storytelling is vital for any new entity coming to market.
Another reason spin-offs are on my mind this week is that our latest CFO interview – part of our long-running series of Q&As with finance chiefs – is with a man who has seen rather more than your average number of corporate break-ups.
David Wyshner, CFO at IT infrastructure company Kyndryl, has been involved in an impressive six different spin-offs during his career – including at his current employer, which split from IBM in 2021. He recalls each transaction fondly, saying they are like children: each is unique but you love them all.
In the interview, Wyshner discusses how IR can best support a spin-off process: ‘During this time, it’s crucial to align on the company’s identity, culture, and business strategy,’ he says. ‘Investing time to create a compelling investment thesis that the management team and I can present to the investor community is essential to generate interest in the new stock.’
He also explains what he seeks when hiring an IRO: ‘Some of the qualities I look for in these individuals include high integrity, hard work, thoughtfulness and knowledge about how the market will react to things. This is something that not many people in a large company are necessarily used to thinking about.’
Have you helped guide your company through a major corporate transaction? Get in touch and let us know at [email protected] or on LinkedIn.
