J&J Consumer-Health IPO Stock Kenvue to Raise $3.8 Billion

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Johnson & Johnson
’s
consumer-health spinoff

Kenvue

is scheduled to start trading on Thursday, with a market value of at least $41 billion.

In a sign that underwriters are sensing a healthy appetite for Kenvue stock among investors, the shares were priced Wednesday night at $22, the high end of the $20 to $23 initial-public-offering range previously signaled, and said they would offer more shares than anticipated.

Now, Kenvue and Johnson & Johnson (ticker: JNJ) are offering nearly 173 million shares of Kenvue, and are giving their underwriters an option to buy another 26 million shares. The companies had previously said they would offer 151 million Kenvue shares, with an option for underwriters to buy an additional 23 million.

Johnson & Johnson will own 90.9% of Kenvue after the completion of the IPO. The company will eventually distribute those shares to its own shareholders.

Kenvue will trade on the New York Stock Exchange under the ticker KVUE. The new company sells some of the most recognizable consumer-health brands in the world, including Tylenol, Motrin, Benadryl, Band-Aid, Zyrtec, and Neutrogena. Last week, Barron’s argued that investors should buy Kenvue shares, calling the valuation “relatively cheap.”

The IPO will raise $3.8 billion, which Kenvue says in a securities filing that it will pay to Johnson & Johnson. The timing of Johnson & Johnson’s distribution of Kenvue shares to its shareholders is not clear; according to Kenvue’s regulatory filing, the company will need the permission of its underwriters to make the distribution in fewer than 180 days.

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Kenvue on Thursday will join rival

Haleon

(HLN) as a publicly traded branded consumer-health company. Haleon, which went public last year, was previously a joint venture between

GSK

(GSK) and

Pfizer

(PFE). It sells Sensodyne, Centrum, Flonase, Advil, Panadol, and a long list of other major brands. Before last year, consumer-health products were generally tucked into the portfolios of big pharma firms, or consumer product giants such as

Procter & Gamble

(PG).

The IPO will leave Johnson & Johnson with its pharmaceutical and medical device businesses. Johnson & Johnson had been among the last big pharma giants to stick to a conglomerate model, while peers such as

Eli Lilly

(LLY), Pfizer, and GSK have shed all but their core biopharma businesses.

The Kenvue IPO could be the largest by far of the year, though it likely doesn’t signal any broad shift in investors’ appetite for IPOs.

Write to Josh Nathan-Kazis at [email protected]