Dictionary

newco en · NOUN

Etymology

From new + co.

Meanings

1. A new company, especially one spun-off from or replacing an existing company as a legal fiction to maintain ownership over an entity while separating it from the old company financially.
   • 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. 2011, Ernst & Young, International GAAP 2012: Generally Accepted Accounting Practice Under International Financial Reporting Standards, John Wiley and Sons, →ISBN, page 580:
   • 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. 2008, Steve Cropper with Mark Ebers and Chris Huxham, The Oxford Handbook of Inter-Organizational Relations, page 91:
   • This is not an unusual situation since some acquisition vehicles are "newcos" that have not conducted any business activities prior to the acquisition. 2000, Tax strategies for corporate acquisitions, dispositions, ..., volume 2, Practising Law Institute:
   • 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 2003, Mergers and acquisitions yearbook:
   • 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. 1999, Edward E. Shea, The McGraw-Hill Guide to Acquiring and Divesting Businesses, →ISBN, page 227:
   • Sales of divisions of larger businesses usually require the creation of a newco. 2008, Stephen Bloomfield, Venture Capital Funding: A Practical Guide to Raising Finance, page 160:
   • 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. 2012 May 5, “Rangers likely to stay in SPL, says Michael Johnston”, in BBC Sport:
2. A placeholder name for a business in textbooks.
   • Those who were more attached to NewCo discussed more positively their ability to charge OldCo for work, to take the 'commercial' view. 2012, Stephanie J. Morgan, The Human Side of Outsourcing: Psychological Theory and Management Practice, →ISBN:
   • In this structure, the acquirer (A) forms a wholly owned subsidiary (call it NewCo). A will transfer the merger consideration to NewCo in exchange for all of NewCo's stock. Then Target will merge into NewCo (or NewCo will merge into Target). 2003, William T. Allen, Reinier H. Kraakman, Commentaries and Cases on the Law of Business Organization, page 439:
   • 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. 1982, Arthur M. Borden, Going Private, pages 3–4:
   • For this example, we're going to assume that a new company (we will call it NewCo) is going to build brick homes in the $250,000 price range. 2008, Edward D. Hess, Charles D. Goetz, So, You Want to Start a Business?: 8 Steps to Take Before Making the Leap, page 62:

Forms

Relateds

shell · clean shell