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Johnson & Johnson’s Consumer Health Spinoff Kenvue Becomes US Largest IPO since 2021
Kenvue, the consumer-health spinoff announced by Johnson & Johnson (NYSE: JNJ) last year, has become the largest US IPO in over a year after going public on Thursday. The Kenvue brand debuted on the New York Stock Exchange (NYSE), causing J&J’s shares to soar 22% on the same day. At the initial public offering (IPO), Kenvue was priced at $22 a night before its launch. However, the new company’s shares opened at $25.53 and closed at $26.90.
Kenvue Become Largest US IPO in Over a Year
Kenvue sold over 172.8 million shares during its IPO, more than the initial plan of 151 million. It secured approximately $3.8 billion from the sale, pushing the company’s valuation to approximately $41 billion. Following the public launch, Kenvue now trades under the ticker “KVUE” and covers a wide range of top consumer brands like Neutrogena, J&J’s namesake baby powder, Band-Aid, Listerine, Tylenol, and Aveeno.
Speaking on Thursday morning ahead of the debut, Kenvue CEO Thibaut Mongon was confident that millions globally woke up with at least one of the company’s products in their homes. Mongon used to be J&J’s executive vice president and worldwide chair of consumer health. Now, he will serve on Kenvue’s board.
Interestingly, Kenvue has been stacking up profits before its IPO. According to reports filed with the US Securities and Exchange Commission (SEC), the J&J subsidiary generated $14.95 billion in sales for 2022 and a net income of $1.46 billion on a pro forma basis.
Additionally, first-quarter sales were around $3.85 billion, while its net income was about $330 million. It considers these results preliminary as it aims to grow its global annual sales through 2025 by 3-4%.
Despite the success of Kenvue’s IPO, Johnson & Johnson remains under allegations that some of its talc products are cancerous. These products are registered under J & J’s newly created business, Kenvue. However, the IPO filing shows that the spinoff will only respond to talc-related liabilities outside the US and Canada.
After being questioned on the liabilities, Mongon said Kenvue is “laser-focused on what we do best: serving our customers and also our portfolio with the brands that we mentioned”.
Kenvue Rejuvenate Hope in Collapsing Market
The debut of Kenvue has raised hope for the revival of the US IPO market after it collapsed last year. According to Renaissance Capital, the company’s public debut is currently the highest IPO this year. The combined value of the 40 IPOs in 2023 is about $2.4 billion, trailing by over $1 billion compared to Kenvue.
Since 2021, no IPO has surpassed the debut of Rivian, an electric vehicle maker that went public in November 2021. Shares of Rivian (RIVN) spiked by over 50 %, from $78 per price to $106.75. Regardless, Kenvue has overtaken Rivian to become the largest IPO.
Johnson & Johnson’s Consumer Health Spinoff Kenvue Becomes US Largest IPO since 2021
