- Johnson & Johnson pulled off the largest initial public offering in a year and a half, spinning off its consumer health business with iconic brands including Tylenol and Band-Aid.
- The newly public spinoff, Kenvue, will begin trading Thursday under the symbol “KVUE.” The IPO included 172.8 million shares priced at $22 each, with an option for underwriters to buy almost 26 million more shares, J&J said Wednesday. Last month, Kenvue had said it planned to sell 151.2 million shares in an estimated range of $20 to $23 each.
- After the close of the IPO, J&J will still own between 89.6% and 90.9% of the consumer health company’s stock, and plans to later distribute all or a portion of that equity interest to its shareholders. The spinoff allows the now slimmer J&J to focus on pharmaceuticals and medical devices.
The $3.8 billion haul represents the largest IPO since electric car marker Rivian raised $11.9 billion in November 2021 and could boost the struggling market for public offerings in the U.S.
With the Kenvue spinoff and an offering from the biotechnology company Acelyrin due to price Thursday night, IPO proceeds this year are “all but guaranteed to surpass last year’s total” of $7.7 billion, according to Renaissance Capital. IPO proceeds totaled just $2.4 billion this year before Kenvue’s debut.
The softening of the IPO market has especially been felt in the biotechnology industry. Only five biotechs have completed IPOs this year, the slowest pace at the beginning of a year since 2018.
Of course, Kenvue is not the typical startup going public. The company has revenue of $15 billion and a group of J&J’s best-known brands. In addition to Tylenol and Band-Aid, Kenvue will sell commonly used products including Listerine, Neutrogena and Aveeno.
Founded in 1886 as a maker of sterile surgical products, J&J became a behemoth as well-known for its baby powder as its cutting-edge medicines in the following century. The company’s streamlining efforts are meant to focus on the higher-margin pharmaceuticals and medical devices that account for far more of its revenue.