Alpha’s Founder Featured in Recent Article in Financial Times’ Agenda

The corporate spinoff market is booming, and if you’re leading a public company, chances are you’ve already had, or will soon have, conversations about whether breaking up your business could unlock value. Alpha IR and Alpha Advisory Groups’ CEO & Founder Chris Hodges recently spoke with Emma Sandler from the Financial Times publication, Agenda about the recent surge of spinoffs. The article (LINK) highlighted that 2024 saw 20 U.S. spinoff IPOs valued at a cumulative $12.8 billion, nearly double the previous year’s activity. The momentum isn’t slowing, and many companies are now taking proactive steps before activist investors force their hand.

Hodges noted in the article:

“Activists are far more open to attacking large companies, and you’re seeing large companies [spinning off] where it used to be more conglomerates.”

This shift signals a fundamental change in the way activist investors operate. In a challenging M&A market, spinoffs and/or divestitures have become a preferred strategy for both boards and activists looking to unlock shareholder value as pure play companies are easier to value.

Why Spinoffs Are Surging

Several factors are driving this trend in corporate spinoffs including:

  • A sluggish M&A market – Mergers and acquisitions have slowed significantly, with U.S. deal activity down nearly 30% year-over-year according to the article. With fewer acquisition opportunities, companies are turning inward to create value.
  • Activists adapting their playbook – Activists are increasingly pointing to asset mix to simplify operations and harness cash flow for the most attractive uses. As such, investors are focusing more on corporate structure and demanding strategic separations.
  • Boards acting preemptively – Instead of waiting for activists to dictate strategy, many boards are taking the initiative to evaluate potential spinoffs before an activist forces their hand.

The Boardroom Imperative: Think Like an Activist

Spinoffs can be powerful tools for unlocking value—but they’re not without risk. As Hodges mentioned in Agenda:

“There’s no question that the heightened sensitivity boards have toward activists over the last four or five years … [makes them] cognizant of where their vulnerabilities are in looking for ways to consistently maximize value. Spinoffs have a history of creating value, at least in the short to midterm.”

However, companies that rush into a spinoff without proper planning may find themselves vulnerable. As the Agenda article points out, newly formed entities can become easy activist targets due to gaps in their bylaws or governance structures. This makes proactive strategic planning all the more essential.

How Alpha Helps CEOs, CFOs & IR Leaders Navigate This Shift

At Alpha IR and Alpha Advisory Groups, we specialize in helping companies anticipate and respond to these evolving market dynamics. Our team advises CEOs, CFOs, and investor relations professionals on:

  • Proactive Activist Readiness – We help boards and management teams assess potential vulnerabilities before activists come knocking.
  • Strategic Communications for Spinoffs – A well-articulated value proposition is key to a successful separation. We guide companies in crafting compelling narratives for investors, employees, and stakeholders.
  • Investor & Market Positioning – We ensure that companies emerging from a spinoff maintain strong market perception and attract the right institutional investors.

Final Thoughts

Spinoffs are no longer just an option, for many companies they are becoming a necessity. The question for your company is when and how to do it effectively. With activist investors sharpening their focus on corporate structure, boards must stay ahead of the curve.

If you’re a CEO, CFO, or Investor Relations leader looking to navigate this complex environment, Alpha Advisory Group is here to help you stay ahead of activists, optimize your corporate structure, and maximize shareholder value.