Newco

As described in the previous section, a leveraged buyout by a Newco that does not result in a change of control is treated as a recapitalization and EITF 88-16 prescribes the use of predecessor basis.

This is not an unusual situation since some acquisition vehicles are "newcos" that have not conducted any business activities prior to the acquisition.

If buyer has no such plans then the purchaser will probably be a newco, since in this structure the corporate veil will protect the buyer's assets from claims made against the target

Sales of divisions of larger businesses usually require the creation of a newco.

In this chapter we define collaborations between firms that involve the creation of a separate, autonomous, and legally recognized firm—a 'newco'—as a joint venture.

Another situation in which a Newco may be identified as the acquirer is illustrated in Example 10.8 below, where a parent uses a Newco to facilitate a public flotation of shares in a group of subsidiary companies.

Rangers manager Ally McCoist accepts there is likely to be opposition from fans of other clubs should the Ibrox side remain in the SPL as a newco.

A merger can be implemented between the issuer ("Oldco") and a new corporation ("Newco") owned by the proponents, as a result of which Oldco shares not owned by the proponents are converted to cash and Newco shares remain outstanding.