Johnson & Johnson’s consumer division, Kenvue, made its debut on the New York Stock Exchange on Thursday with an initial public offering (IPO) that valued the unit at $41bn. This is the largest US listing in almost a year and a half. Sources stated that Kenvue sold $3.7bn worth of stock at $22 per share, which was marginally higher than the midpoint of its proposed price range. Kenvue is a maker of household names such as Tylenol, Listerine, and Aveeno skincare products.
The IPO, which raised more than twice the amount of traditional US listings this year, is the biggest since Rivian’s offering in November 2021. Kenvue reported a revenue of $15bn and a pro forma net income of $1.5bn in 2022. The company also makes Johnson & Johnson’s baby powder products, which have been the subject of lengthy legal battles about whether they caused cancer. The new firm has been proactively designated in lawsuits. Johnson & Johnson stated that it would protect Kenvue from any legal expenses linked with baby powder sales in the United States and Canada.
Despite a lengthy downturn in decades, Kenvue’s successful IPO has come at a time when a combination of rising interest rates, volatile stock markets, and pessimistic economic forecasts have engulfed the US IPO market. Only $2.4 billion was raised this year through traditional IPOs before the Kenvue offering on Wednesday, according to Dealogic data. The listing has highlighted investors’ appetite for household name consumer products, which have proved resilient during the pandemic.
Kenvue’s IPO is a significant milestone for Johnson & Johnson, which has been streamlining its operations in recent years. The decision to spin off its consumer business was motivated by the need to focus on its more profitable pharmaceutical and medical devices divisions. With the successful IPO, Johnson & Johnson will continue to own more than 90% of Kenvue’s shares, but Kenvue’s prospects are promising, and it has an opportunity to become a leader in the consumer products sector.
