What you need to know about consumer health spinoffs

Johnson & Johnson products on store shelves in New York.

Lucas Jackson | Reuters

Johnson & Johnson’s Consumer health business Kenview Wednesday’s IPO price was $22 a share, heading toward the upper end of the prescribed range, in a large deal worth about $3.8 billion, a person familiar with pricing told CNBC.

At its IPO price, the new company would be valued at about $41 billion. That makes Kenvue’s debut one of his biggest US IPOs in over a year.

The company expected to price the 151 million shares at between $20 and $23 per share. provisional prospectus filed with the Securities and Exchange Commission last week.

Proceeds from the public offering and profits from the related debt financing transaction will go to J&J, while Kenvue will retain $1.17 billion in cash and cash equivalents.

goldman sachs, JP Morgan Chase and bank of america Acting as the lead underwriter of the IPO.

The stock will begin trading on the New York Stock Exchange on Friday under the ticker “KVUE.”

spin off, Largest IPO Since EV maker Rivian went public in November 2021, it may not be able to turn around the dying IPO market all by itself. plummeted But it could be a sign of an initial public offering in the US

Kenvue’s debut is also the biggest restructuring in J&J’s 135-year history. J&J declared a split in late 2021 as a bid to streamline operations and refocus on the pharmaceuticals and medical devices sector.

Kenvue, on the other hand, is chock full of names familiar to investors and the public, including Tylenol, Band-Aid, Listerine, Aveeno, Neutrogena, and J&J’s eponymous baby powder and shampoo.

Here’s everything else you need to know about Kenvue’s IPO this week.

Ownership after IPO

According to the prospectus, J&J will control 91.9% of Kenvue after the IPO, and 90.8% if the underwriters exercise their option to purchase additional shares.

J&J plans to distribute the remaining common stock to shareholders later this year.

Until then, Kenvue qualifies as a “controlled entity” under the NYSE’s corporate governance rules, the filing said. This allows Kenvue to circumvent certain listing criteria, including the requirement that the company’s board consist of a majority of independent directors.

J&J will generally be able to control matters on which shareholders vote, including the election of directors to Kenvue’s board of directors, the filing said.

“Johnson & Johnson will continue to control the direction of our business and the concentration of ownership of our common stock may prevent you or other shareholders from influencing important decisions. There is potential,” Kenview said in the filing.

performance

Kenvue is profitable and expects modest growth over the next few years, the company said in a filing.

Annual sales growth to 2025 is projected to be around 3% to 4% globally, according to the filing.

Kenvue had 2022 revenue of $14.95 billion and net income of $1.46 billion. Kenvue estimates that in the first quarter that ended April 2, he had $3.85 billion in sales and about $330 million in net income. These first quarter results are preliminary.

Ten of Kenvue’s brands had sales of about $400 million or more last year.

Overall, Kenvue said 2022 sales are “balanced” across the company’s three business units.

The company’s self-care segment, which includes products such as eye care, cough and cold, and vitamins, will have net sales of $6 billion in 2022, or 40% of total revenue.

Skin health and beauty products generated $4.4 billion in net sales last year, or 29% of total revenue. These products include shampoos, conditioners, hair loss treatments and skin care.

Additionally, essential health products such as baby products, mouthwashes, dental rinses, hygiene protection and wound care had net sales of $4.6 billion, representing 31% of total sales.

Each of the three divisions was profitable on an adjusted operating profit basis, the company said in a filing.

Kenvue says its global footprint is “geographically balanced,” with about half of its 2022 net sales coming from outside North America.

The filing puts the company’s net debt at $7.75 billion.

business administration

Kenvue rounded up Several J&J executives According to the documents, he heads the company.

Thibaut MongonExecutive Vice President and Global Chairman of Consumer Health at J&J.He also serves on the Board of Directors.

Paul Lu, J&J’s Chief Financial Officer of Consumer Health and former PepsiCo executive, will serve as CFO, while Meredith Stevens, Worldwide Vice President of J&J’s Consumer Health Supply Chain Division, will serve as COO.

Kenvue’s Chief People Officer, Chief Corporate Affairs Officer, Chief Technology and Data Officer, Chief Scientific Officer, and Group Presidents in various regions around the world are also from J&J.

According to the preliminary prospectus, the executives will lead a team of more than 22,000 employees spread across 165 countries and 25 internal manufacturing sites.

in Kenview global headquarters It will be Summit, New Jersey.

Talc cancer litigation

J&J faces thousands of allegations that talc baby powder and other talc products have caused cancer. Some of these products fall within the Company’s Consumer Health business.

However, Kenvue will only accept talc-related liability outside the United States and Canada. IPO application From January.

Eric Haas, vice president of litigation for Johnson & Johnson, said, “As is clearly and unambiguously stated, Johnson & Johnson will not be liable for all talc-related liability arising from litigation in the United States and Canada. and agreed to reimburse Kenview for all costs.” & Johnson said in a statement last week:

However, Kenvue said in the filing that “such indemnification may not be sufficient” to protect the new company from full debt.

J&J plans to continue its fight against talc claims in bankruptcy court.

April bankruptcy judge temporarily stopped About 40,000 talc lawsuits by mid-June. That decision was part of his J&J’s second attempt to settle talc claims in bankruptcy proceedings.

The temporary stay gives J&J time to seek court approval. $8.9 billion Settlement proposal with the plaintiff in the talc case.

— CNBC’s Leslie Picker Contributed to this report.

Summarize this content to 100 words Johnson & Johnson products on store shelves in New York.Lucas Jackson | ReutersJohnson & Johnson’s Consumer health business Kenview Wednesday’s IPO price was $22 a share, heading toward the upper end of the prescribed range, in a large deal worth about $3.8 billion, a person familiar with pricing told CNBC. At its IPO price, the new company would be valued at about $41 billion. That makes Kenvue’s debut one of his biggest US IPOs in over a year.The company expected to price the 151 million shares at between $20 and $23 per share. provisional prospectus filed with the Securities and Exchange Commission last week.Proceeds from the public offering and profits from the related debt financing transaction will go to J&J, while Kenvue will retain $1.17 billion in cash and cash equivalents.goldman sachs, JP Morgan Chase and bank of america Acting as the lead underwriter of the IPO. The stock will begin trading on the New York Stock Exchange on Friday under the ticker “KVUE.”spin off, Largest IPO Since EV maker Rivian went public in November 2021, it may not be able to turn around the dying IPO market all by itself. plummeted But it could be a sign of an initial public offering in the US Kenvue’s debut is also the biggest restructuring in J&J’s 135-year history. J&J declared a split in late 2021 as a bid to streamline operations and refocus on the pharmaceuticals and medical devices sector. Kenvue, on the other hand, is chock full of names familiar to investors and the public, including Tylenol, Band-Aid, Listerine, Aveeno, Neutrogena, and J&J’s eponymous baby powder and shampoo. Here’s everything else you need to know about Kenvue’s IPO this week. Ownership after IPOAccording to the prospectus, J&J will control 91.9% of Kenvue after the IPO, and 90.8% if the underwriters exercise their option to purchase additional shares.J&J plans to distribute the remaining common stock to shareholders later this year.Until then, Kenvue qualifies as a “controlled entity” under the NYSE’s corporate governance rules, the filing said. This allows Kenvue to circumvent certain listing criteria, including the requirement that the company’s board consist of a majority of independent directors. J&J will generally be able to control matters on which shareholders vote, including the election of directors to Kenvue’s board of directors, the filing said. “Johnson & Johnson will continue to control the direction of our business and the concentration of ownership of our common stock may prevent you or other shareholders from influencing important decisions. There is potential,” Kenview said in the filing. performance Kenvue is profitable and expects modest growth over the next few years, the company said in a filing.Annual sales growth to 2025 is projected to be around 3% to 4% globally, according to the filing. Kenvue had 2022 revenue of $14.95 billion and net income of $1.46 billion. Kenvue estimates that in the first quarter that ended April 2, he had $3.85 billion in sales and about $330 million in net income. These first quarter results are preliminary.Ten of Kenvue’s brands had sales of about $400 million or more last year.Overall, Kenvue said 2022 sales are “balanced” across the company’s three business units.The company’s self-care segment, which includes products such as eye care, cough and cold, and vitamins, will have net sales of $6 billion in 2022, or 40% of total revenue.Skin health and beauty products generated $4.4 billion in net sales last year, or 29% of total revenue. These products include shampoos, conditioners, hair loss treatments and skin care. Additionally, essential health products such as baby products, mouthwashes, dental rinses, hygiene protection and wound care had net sales of $4.6 billion, representing 31% of total sales.Each of the three divisions was profitable on an adjusted operating profit basis, the company said in a filing.Kenvue says its global footprint is “geographically balanced,” with about half of its 2022 net sales coming from outside North America. The filing puts the company’s net debt at $7.75 billion.business administrationKenvue rounded up Several J&J executives According to the documents, he heads the company. Thibaut MongonExecutive Vice President and Global Chairman of Consumer Health at J&J.He also serves on the Board of Directors.Paul Lu, J&J’s Chief Financial Officer of Consumer Health and former PepsiCo executive, will serve as CFO, while Meredith Stevens, Worldwide Vice President of J&J’s Consumer Health Supply Chain Division, will serve as COO.Kenvue’s Chief People Officer, Chief Corporate Affairs Officer, Chief Technology and Data Officer, Chief Scientific Officer, and Group Presidents in various regions around the world are also from J&J. According to the preliminary prospectus, the executives will lead a team of more than 22,000 employees spread across 165 countries and 25 internal manufacturing sites. in Kenview global headquarters It will be Summit, New Jersey. Talc cancer litigation J&J faces thousands of allegations that talc baby powder and other talc products have caused cancer. Some of these products fall within the Company’s Consumer Health business.However, Kenvue will only accept talc-related liability outside the United States and Canada. IPO application From January.Eric Haas, vice president of litigation for Johnson & Johnson, said, “As is clearly and unambiguously stated, Johnson & Johnson will not be liable for all talc-related liability arising from litigation in the United States and Canada. and agreed to reimburse Kenview for all costs.” & Johnson said in a statement last week:However, Kenvue said in the filing that “such indemnification may not be sufficient” to protect the new company from full debt. J&J plans to continue its fight against talc claims in bankruptcy court. April bankruptcy judge temporarily stopped About 40,000 talc lawsuits by mid-June. That decision was part of his J&J’s second attempt to settle talc claims in bankruptcy proceedings.The temporary stay gives J&J time to seek court approval. $8.9 billion Settlement proposal with the plaintiff in the talc case.— CNBC’s Leslie Picker Contributed to this report.
https://www.cnbc.com/2023/05/03/jj-kenvue-ipo-what-to-know.html What you need to know about consumer health spinoffs

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