Johnson & Johnson ‘s (JNJ) consumer-health unit Kenvue (KVUE) soared more than 22% on its first day of trading Thursday, bringing the Club holding one step closer to completing its business separation. The planned split, which is set for later this year, is in the best interest of shareholders of both the soon-to-be-solo Kenvue operations and the new pharma and medtech-focused J & J. Kenvue closed its debut session at nearly $27 per share, giving the maker of Tylenol, Band-Aid and other well-known consumer products an implied valuation of more than $50 billion. J & J raised $3.8 billion in Kenvue’s initial public offering, selling 172.8 million shares at $22 each. J & J had previously expected to sell 151 million shares between $20 and $23 apiece. J & J will own just under 91% of Kenvue when the IPO is officially complete in the coming days, or 89.6% if the investment banks that underwrote the offering exercise their full option to sell additional shares. J & J intends to complete the Kenvue separation by the end of 2023, pending market conditions. The remaining J & J will consist of its pharmaceutical and medical technology divisions, which accounted for 84% of the company’s total revenue of $94.94 billion revenue in 2022. Here’s what else J & J shareholders should know about Kenvue’s IPO. Why don’t we own any Kenvue yet? Will we ever? As of Thursday, the Club continues to own 625 shares of Johnson & Johnson and zero Kenvue. The reason? J & J chose to divest Kenvue in a two-step process that begins with something known as an equity carve-out . This first step is what’s played out with Kenvue’s listing on the New York Stock Exchange. J & J created a standalone entity, Kenvue, for its consumer health division; then sold a small piece of it to institutional investors; and in the process raised capital. In theory, J & J could have divested Kenvue without an IPO. The company could’ve done a traditional spin-off, where it just gives its shareholders stakes in Kenvue…
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