2023-04-23 20:50:13 ET
Healthcare giant Johnson & Johnson ( NYSE: JNJ ) is expected to begin a roadshow to pitch shares of its consumer-healthcare spinoff, Kenvue, as early as Monday, The Wall Street Journal reported citing people familiar with the matter.
Kenvue plans to start meeting prospective investors to raise $3.5B or more from the IPO, which can value the firm at approximately $40B, the people said. Companies typically conduct IPO roadshows a few days to a week before a public debut.
If JNJ succeeds in its plans for the listing, Kenvue’s stock is expected to trade on the New York Stock Exchange under the ticker symbol KVUE.
In 2021, JNJ ( JNJ ) announced plans to separate its consumer unit that houses household brands such as Tylenol and Band-Aids from its pharmaceutical and medical-device businesses, which generally indicated better sales growth and profit margins than the former in recent years.
Immediately after the IPO, JNJ ( JNJ ) expects to retain a majority ownership of the business before trimming the rest of its stake later this year. Per Wall Street estimates compiled by FactSet, Kenvue is projected to record about 4%, 2%, and 3% of annual sales growth in 2023, 2024, and 2025, respectively.
The share offer backed by Goldman Sachs ( GS ) and JPMorgan Chase ( JPM ) as lead underwriters could be by far the largest in a quiet IPO market in the U.S. this year. According to Dealogic, the companies have raised only $2.3B from traditional IPOs so far in 2023, marking the lowest start for a year since 2009.
Following the spinoff, Kenvue will compete against consumer-product giants such as Procter & Gamble ( PG ), consumer divisions of healthcare firms including Bayer ( OTCPK:BAYZF ) and Sanofi ( SNY ), as well as Haleon ( HLN ), the healthcare spinoff of GSK ( GSK ) which made its public debut in July 2022.
For further details see:
Johnson & Johnson to launch IPO roadshow for consumer health unit – WSJ