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Kenvue's $3.3 billion IPO terms

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Kenvue, the consumer health products unit spun out of J&J, announced terms for its IPO with a $3.3 billion raise.

Why it matters: If successful, Kenvue's could be the largest U.S. IPO since Rivian went public in late 2021 — and would inject much-needed optimism into the public markets.

Details: The Skillman, N.J.-based company plans to offer 151.2 million shares (100% synthetic secondary) at a price range of $20 to $23, according to Renaissance Capital.

  • At the midpoint of the proposed range, Kenvue would command a fully diluted market value of $40.6 billion.
  • The company expects to pay a quarterly dividend starting in 3Q23.
  • The company booked $15 billion in revenue for the 12 months ended Jan. 1.

What's next: Kenvue will list on the NYSE under the symbol KVUE.

  • Goldman Sachs, J.P. Morgan, BofA Securities, Citi, Deutsche Bank, BNP Paribas, HSBC, RBC Capital Markets, and UBS Investment Bank are the joint bookrunners on the deal.
  • The company will price during the week of May 1.

Catch up quick: J&J announced 17 months ago that it would spin off the consumer health unit, following similar moves by pharma rivals GSK and Pfizer.

Zoom in: The unit houses some big-name and often-used brands.

  • Its differentiated portfolio of well-known brands includes Tylenol, Band-Aid, Neutrogena, Aveeno, Nicorette, Zyrtec, and Listerine.
  • J&J's consumer health segment generated revenue of $14.6 billion in full-year 2021.
  • Consumer health generated sales of $14.95 billion in 2022, a 0.5% decline from the year prior. The group accounted for 16% of the company’s overall revenue, according to J&J.

State of play: The Kenvue spinoff pulls from an established playbook of pharma spinning out or divesting their consumer health divisions.

  • GlaxoSmithKline spun off its GSK Consumer Health, dubbed Haleon, business last year at a $34 billion valuation.
  • In 2018, Novartis, Merck KGaA, Bristol-Myers Squibb, Bayer and Pfizer divested all or pieces of their consumer franchises.
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