KVUE begins trading on NYSE


Thibaut Mongon, CEO and Paul Ruh CFO of Kenvue Inc., a Johnson & Johnson consumer healthcare business, pose together during the company’s IPO on the New York Stock Exchange (NYSE) in New York, USA States, May 4, 2023.

Brendan McDermid | Reuters

Johnson & JohnsonKenvue’s consumer health spin-off jumped 16% in its New York Stock Exchange debut on Thursday, marking the biggest U.S. IPO in more than a year.

The new company opened at $25.53 per share after initially pricing its IPO at $22 on Wednesday night, towards the top of its target range.

Kenvue sold 172.8 million shares in an oversized deal that raised around $3.8 billion and valued the company at around $41 billion.

At its opening price, Kenvue had an implied valuation of nearly $48 billion.

The company, which trades under the symbol “KVUE”, owns a host of well-known consumer brands such as Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s namesake baby powder.

“Millions of consumers around the world wake up this morning to a Kenvue product in their homes,” said the CEO Thibaut Mongontold CNBC’s “Squawk on the Street” Thursday morning before the action debuted.

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

Thibaut Mongon, CEO of Kenvue Inc., a Johnson & Johnson consumer healthcare business, rings the opening bell to celebrate its IPO on the New York Stock Exchange (NYSE) in New York, United States, on May 4, 2023.

Brendan Mcdermid | Reuters

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

J&J first announced the spin-off in November 2021 in a bid to streamline operations and refocus on its faster-growing medical device and pharmaceutical divisions.

But J&J will generally be able to control the direction of Kenvue’s affairs and the issues shareholders vote on for the time being: The healthcare giant will own 1.7 billion ordinary shares of Kenvue after the IPO ends. exchange, representing a 90.9% stake. 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 part ways with Kenvue in 2023.

Kenvue expects to pay a quarterly cash dividend of about 20 cents per share beginning in the third quarter, which ends Oct. 1.

Mongon called it an “attractive dividend policy that will be a way for us to produce more shareholder value.”

Meanwhile, the consumer-focused Kenvue is already profitable. Kenvue reported 2022 revenue of $14.95 billion and net income of $1.46 billion 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. Kenvue is a healthy company,” Mongon told CNBC.

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

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

The IPO still leaves J&J liable for thousands of allegations that its talc-based baby powder and other talc-based products have caused cancer. Those products fall under the consumer health business of the company, now Kenvue, but the spin-off will only handle talc-related liabilities that arise outside of the United States and Canada, according to its IPO filing from January.

Asked about the liabilities, Mongon said Kenvue is “laser focused on what we do best: serving our customers and also our portfolio with the brands we mentioned.”

Debut raises hopes muted U.S. IPO market may recover after this collapsed Last year.

Kenvue’s IPO has raised more than any other offering so far this year, according to a report from Renaissance Capital, with just 40 IPOs in 2023 generating a combined total $2.4 billion.

The spin-off is also the biggest IPO since electric vehicle maker Rivian went public in November 2021.

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