J&J’s consumer-health spinoff Kenvue jumps 20% in public market debut


shares of Johnson & Johnsonconsumer-health byproduct of kenview It then jumped 20% in afternoon trade on Thursday market debut on the New York Stock Exchange, making it the largest US IPO in more than a year.

The new company opened at $25.53 per share after originally pricing it initial public offering Wednesday Night at $22, Towards the High End target range,

At its initial price, Kenview had an estimated valuation of approximately $48 billion.

Kenview sold 172.8 million shares in the offering, raising $3.8 billion and putting the company at a valuation of approximately $41 billion. The company initially planned to sell 151 million shares.

The company, which trades under the ticker KVUE, owns a wealth of widely known consumer brands such as Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s baby powder.

“Millions of consumers around the world wake up this morning with a Kenview product in their home,” said the CEO. thibaut mongontold CNBC “Scream on the Street” Thursday morning before the start of the stock.

Mongon previously served as J&J’s executive vice president and worldwide president of consumer health. He will sit on the board of Kenvue.

Thibaut Mongon, CEO of Johnson & Johnson’s consumer-health business Kenview Inc, rings the opening bell to celebrate its IPO at the New York Stock Exchange (NYSE) on May 4, 2023 in New York City, US.

Brendan McDermid | reuters

Kenvue’s IPO is the largest restructuring move in J&J’s 135-year history.

J&J first announced it By-product in November 2021 as part of an effort to streamline operations and refocus on its fast-growing medical devices and pharmaceutical divisions.

But the company will generally be able to control the direction of Kenvue’s business and matter if shareholders vote for the time being: The healthcare giant will own 1.7 billion shares of Kenvue’s common stock after the IPO is completed. Which represents 90.9% share. J&J will reduce its remaining stake in Kenvue later this year.

Mongon told CNBC that J&J has been “very clear” about its intention to separate from Kenview this calendar year.

Kenview expects to pay a quarterly cash dividend of approximately 20 cents per share beginning in the third quarter, which ends October 1. Mongon called it an “attractive dividend policy that will be a way for us to return more value to shareholders.”

CEO of Johnson & Johnson’s consumer-health business Kenview Inc. and Paul Ruh CFO, Thibaut Mongon, pose together during the company’s IPO on the New York Stock Exchange (NYSE) on May 4, 2023 in New York City, US.

Brendan McDermid | reuters

Meanwhile, consumer-focused Kenvue is already profitable. The spinoff will post $14.95 billion in sales for 2022 and $1.46 billion in net income on a pro forma basis, according to a preliminary prospectus Filed with the Securities and Exchange Commission last week.

“We do this from a position of strength. Kenview is a healthy business,” Mongon told CNBC.

For the first quarter, which ended April 2, Kenview estimates it generated sales of $3.85 billion and net income of about $330 million. Those results are preliminary.

According to the filing, it expects annual sales growth to be around 3% to 4% globally through 2025.

The IPO still leaves J&J liable for thousands over allegations that its talc baby powder and other talc products cause cancer. Those products fall under the company’s consumer-health business, which is now Kenview, but the spinoff will only assume talc-related liabilities that arise outside the US and Canada, according to IPO filing since January.

When asked about the liabilities, Mongon said Kenview is “laser-focused on doing what we do best: serving our customers and our portfolio with the brands we represent.”

This debut raises hopes that the quiet US market for initial public offerings may recover after this Collapsed Last year.

According to a report by Renaissance Capital, Kenview’s IPO has raised more money than all other offerings so far this year. 40 IPOs in 2023 Have Raised Only One Combined $2.4 billion,

The spinoff is also the biggest IPO since electric vehicle maker Rivian went public In November 2021.