(Reuters) -Johnson & Johnson said on Monday it was seeking a valuation of up to $42.95 billion in the initial public offering of its consumer health unit, Kenvue, at a time when investor appetite for new listings has been muted.
The announcement sets the stage for what is expected to be one of the marquee listings this year and brings the healthcare conglomerate closer to completing its planned spinoff of the business behind Band-Aid bandages and Tylenol medicines.
However, the listing plans come at a challenging time for the IPO market in the United States. New listings have come to a virtual standstill as investors grapple with heightened volatility in a rising interest rate environment.
J&J is offering 151.2 million shares of the common stock of Kenvue priced between $20 and $23 per share, aiming to raise up to $3.5 billion, based on the top end of the proposed range of the listing.
The company expects to use proceeds of about $3.15 billion for general corporate purposes.
Kenvue’s net sales fell to $14.95 billion in the fiscal year ended Jan. 1 from $15.1 billion in 2022, while its net income rose to $2.1 billion from $2.03 billion, it said in a regulatory filing.
J&J, Kellogg Co and General Electric Co were among the large U.S. corporations that in recent years have laid out plans to spin off units in a bid to simplify their structures and focus on specific money-making areas.
In April, J&J spin-off LTL Management filed for bankruptcy for a second time under a new financing arrangement with J&J. The drugmaker has agreed to pay $8.9 billion, dwarfing its original offer of $2 billion, to settle tens of thousands of lawsuits.
Goldman Sachs and J.P. Morgan are among the underwriters of the listing of Kenvue.
(Reporting by Akash Sriram, Manya Saini and Bhanvi Satija in Bengaluru; Editing by Maju Samuel)
