Kenvue, the patron arm of healthcare large Johnson & Johnson, was valued at $41bn in an upsized preliminary public providing that marked the largest US itemizing in nearly 18 months.
The carved-out firm bought $3.7bn of inventory at a value of $22 per share — barely above the center of its value vary, in line with an individual acquainted with the small print. The inventory will start buying and selling on the New York Inventory Alternate on Thursday.
The deal is the biggest because the IPO of electrical automobile maker Rivian in November 2021, and alone will greater than double the sum raised in conventional US listings this 12 months.
Kenvue produces over-the-counter medicines and types corresponding to Tylenol painkillers, Listerine mouthwash and Aveeno skincare merchandise. It reported income of $15bn and professional forma web earnings of $1.5bn in 2022.
It additionally produces J&J’s child powder merchandise, which have been on the centre of years of authorized battles over whether or not they prompted most cancers, and the brand new firm has already been focused in lawsuits. J&J couldn’t be instantly reached for touch upon the Kenvue providing.
J&J, which is able to proceed to personal greater than 90 per cent of Kenvue’s shares, has agreed to defend it from any authorized prices associated to gross sales of child powder within the US and Canada. Nonetheless, Kenvue cautioned in its prospectus that it “can’t guarantee” traders that the indemnity from its father or mother could be enough, and additionally it is dealing with claims associated to gross sales in different nations.
The US IPO market has been mired in one in all its longest slowdowns in many years since early 2022 due to a mix of rising rates of interest, risky inventory markets and pessimistic financial forecasts. Earlier than Wednesday’s deal, simply $2.4bn had been raised via conventional IPOs this 12 months, in line with Dealogic knowledge.
Kenvue is uncommon amongst IPO candidates in that it’s worthwhile, backed by a big father or mother group, and plans to pay a $1.5bn annual dividend. As such, most bankers don’t anticipate it to set off an instantaneous surge in additional listings, however the deal is nonetheless being carefully watched throughout Wall Avenue as a take a look at of investor confidence.
“It’s fairly idiosyncratic, however . . . I feel it’s a very good signal,” stated a senior government at a financial institution that didn’t work on the deal.
Goldman Sachs, JPMorgan Chase and Financial institution of America have been lead underwriters on the itemizing.
Inflammatory illness specialist Acelyrin is about to supply an extra take a look at for the beleaguered listings market within the coming days with the biggest biotech IPO since June 2021. It’s trying to elevate as much as $477mn at a valuation of as much as $1.6bn.
The biotech sector has been significantly laborious hit by the IPO freeze, as early-stage firms depend on fairness gross sales to fund lengthy and costly drug developments.
