September Spinoffs: Fall & Quarter End Brought Plenty Of New Companies

While it was no Summer of Spin, the month of September witnessed plenty of activity on the spinoff front. In the days prior to month end:

  1. SPX Corporation (SPXC) spun off its flow products business into the aptly named SPX FLOW (FLOW)
  2. Fidelity National Financial Ventures (FNFV) unloaded part of its restaurant empire into J. Alexander Holdings (JAX) in a transaction featuring some dubious self-dealing and self-enriching agreements. The move continues a trend of the company paring down its unrelated assets picked up over the past few years. The spinoff of the rest of its restaurant holdings, American Blue Ribbon Holding Company, is expected sometime this year.

The last day of the third quarter wasn’t quiet either with another two spinoffs being completed:

  1. Capital Southwest Corporation (CSWCspun off its industrials business CSW Industrials (CSWI). Shareholders should have received one share of CSWI for every one share of CSWC owned. The parent will remain a BDC, lending to middle market companies and the new industrials company will focus on three key segments: Industrial Products, Coatings, Sealants & Adhesives and Specialty Chemicals.
  2. The Madison Square Garden Company broke apart its sports networks and its entertainment (arenas and franchises) businesses. The parent company became MSG Networks (MSGN) and the spinoff took on the Madison Square Garden Company name and ‘MSG‘ ticker. Shareholders (both A and B) should have received 1 share of the new MSG for every 3 old MSG shares owned. With the Dolans selling out of Cablevision (CVC), which was once the parent of Madison Square Garden Company, perhaps a sale of the MSG company could come next delivering hope to Knicks and Rangers fans everywhere.

A busy month, but the pipeline is still looking strong despite some recent news from the IRS and slightly more volatile markets.

Disclosure: Author holds no position in any stock mentioned.