It stands for equity carve-out; an initial public offering (IPO)/ initial public sale of a minority interest (e.g., 20% or less) in the equity (stock) of a subsidiary or division by the parent entity. The parent spins off the remaining shares to its existing stockholders at a certain future date. Equity carve-out allows an entity to fully divest its interests, usually over the course of many years, and receive monetary amounts for the shares it sells at the present.

Equity carve-out is a type of corporate reorganization, whereby an entity creates a new subsidiary and subsequently offers its equity stock for sale in an IPO, while retaining management control.

It is also known as a carve-out or a split-off IPO or a partial spin-off.