About 62 spinoffs are likely to be completed in 2014, the highest level since 66 transactions in 2000, according to research firm Spin-Off Advisors. The trend looks set to continue into next year, with many more deals already announced that won't close till then and plenty of activists pressuring companies to break up.
The rise of activist hedge funds is an obvious explanation for the spike in spinoffs. Those funds often identify divisions of companies that arguably have no real connection with the other businesses and suggest they would be worth more as standalone stocks. Activist Carl Icahn, for instance, called for the pending breakup of eBay and its PayPal online payments business earlier this year.