newcos

Noun

newco (plural newcos)

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.
   • 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
2. A placeholder name for a business in textbooks.
   • 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