Capital Southwest Corp. announced that it will spin off three of its portfolio companies into a separate, publicly-traded business. The second, stand-alone company is being called Industrial Co., but will be renamed before filing for an initial public offering.

Bowen Diehl, who joined Capital Southwest in March, is expected to be named CEO of Capital Southwest Corp. with the deal. With the split, both companies plan to restructure how their businesses are organized to better suit their new purposes.

Ultimately, the deal should let CSWC and Industrial have more elbow room with their operations.