J&J Aims For A $43 Billion Valuation Of Its Consumer Health Unit Kenvue

Johnson & Johnson said on Monday that its consumer health unit, Kenvue, would seek a valuation of up to $42.95 billion in its initial public offering, at a time when investor appetite for new listings has been muted. The announcement sets the stage for one of the year's marquee listings and brings the healthcare conglomerate closer to completing its planned spinoff of the business behind Band-Aid bandages and Tylenol medicines. However, the plans for a listing come at a difficult time for the US IPO market.

New listings have virtually ceased as investors grapple with increased volatility in an environment of rising interest rates. J&J is offering 151.2 million shares of Kenvue common stock priced between $20 and $23 per share, with the goal of raising up to $3.5 billion based on the top end of the proposed listing range. "It's definitely an important deal in restarting the U.S. IPO market," said Matthew Kennedy, Renaissance Capital's senior IPO market strategist.

"We do see other companies waiting in the wings, and a positive reception for Kenvue would certainly encourage them to move forward with their listings." Kenvue's net sales fell marginally to $14.95 billion in the fiscal year ended Jan.1. J&J, Kellogg Co, and General Electric Co are among the large U.S. corporations that have announced plans to spin off units in recent years in order to simplify their structures and focus on specific money-making areas. Under a new financing arrangement with J&J, J&J spin-off LTL Management filed for bankruptcy for the second time in April. To settle tens of thousands of lawsuits, the drugmaker has agreed to pay $8.9 billion, far exceeding its initial offer of $2 billion. Underwriters for Kenvue's listing include Goldman Sachs and J.P. Morgan.