The IPOX® Watch - IPO Pre-Launch Analysis: Kenvue Inc.
COMPANY DESCRIPTION
Kenvue is the Johnson & Johnson consumer health business unit spin-off established in 2022. The separation was first announced in 2021 to comprise a broad portfolio that Includes self-care (OTC drug products), skin care and beauty, and essential personal care products (including baby care, feminine care, wound care, and oral health).
BUSINESS MODEL
Kenvue generates revenue from the sale of products in three segments include Self Care (ca. 37% of net sales, major brands include Tylenol, Nicorette, and Zyrtec), Skin Health and Beauty (31%, include Neutrogena and Aveeno), and Essential Health (33%, include Listerine, Johnson's, Band-Aid, and Stayfree).
GROWTH STRATEGIES
Kenvue's growth strategies encompass: 1) enhancing brand relevance through consumer-centric marketing; 2) boosting product availability with omnichannel and e-commerce strategies; 3) driving innovation in connected health solutions and product accessibility; 4) expanding into adjacent categories and new markets; and 5) evaluating acquisitions and partnerships for portfolio and capability enhancement.
USE OF IPO PROCEEDS
Kenvue will not directly use the proceeds from the IPO for its own operations. Instead, Kenvue will pay Johnson & Johnson all of the net proceeds received from the sale of shares of common stock in this offering, including any net proceeds received as a result of any exercise of the underwriters' option.
IPO HISTORY
On May 3, 2023, Kenvue announced the pricing of their IPO at $22/share, towards the upper end of Its expected price range ($20 to $23). The Johnson & Johnson consumer health business spin-off Initially planned to offer 151.20 million shares but later upsized to 172.81 million shares. The initial public offering is led by Goldman Sachs, J.P. Morgan, and BofA and is expected to have a market capitalization of ca. $3.8 billion. Kenvue will start trading on the New York Stock Exchange (the "NYSE") today, May 4, 2023.
Upon completion of the offering, Johnson & Johnson will continue to own more than 90% of the company. Kenvue will be added to the IPOX® 100 U.S. Index (ETF: FPX), replacing social media platform Pinterest (PINS US) in a weight-neutral transaction from Open on May 5, 2023.
