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Fallen Branches When subsidiaries fail on their own, how do you bring them back into the fold?

By Mark Henricks

Opinions expressed by Entrepreneur contributors are their own.

It's not hard to see why companies spin off units. Lastyear, while the Dow Jones Industrial Average lost more than 6percent, telecommunications firm Comverse Technologies spun off itsUlticom Inc. software subsidiary for more than $200 million. IPOinvestors racked up returns exceeding 60 percent for the year.

Spinoffs can be excellent tools to tap value latent in asubsidiary or business unit, according to J. Randall Woolridge,finance professor at Pennsylvania State University in UniversityPark and co-author of Spin-Offs and Equity Carve-Outs(Financial Executives) with Penn State colleague James Miles. Theycan also help the units grow faster and improve profitability.

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