Kenvue Announces Pricing of Secondary Offering

Rhea-AI Summary

Kenvue (NYSE: KVUE) announced the pricing of its secondary underwritten public offering of 182,329,550 shares of common stock at $20.00 per share, expected to close on May 17, 2024.

Kenvue will not sell any shares or receive proceeds from the offering. Instead, Johnson & Johnson (NYSE: JNJ) is expected to exchange these shares for its indebtedness held by Goldman Sachs & Co. and J.P. Morgan, who will then sell the shares to underwriters.

Post-offering, Johnson & Johnson will no longer own any shares of Kenvue. The offering will be managed by Goldman Sachs, J.P. Morgan, BofA Securities, and others. A registration statement on Form S-1 has been filed and declared effective by the SEC.

Positive

• Kenvue's offering is priced at $20.00 per share.
• The offering involves 182,329,550 shares.
• Expected completion date is May 17, 2024.
• After the offering, Johnson & Johnson will no longer own any Kenvue shares.
• The offering is managed by major financial institutions including Goldman Sachs, J.P. Morgan, and BofA Securities.

Negative

• Kenvue will not receive any proceeds from the offering.
• The offering is tied to Johnson & Johnson's debt-for-equity exchange.
• Potential dilution of shares post-offering.
• Dependence on customary closing conditions might introduce risks.

Insights

Financial Analyst

Kenvue's secondary offering of 182,329,550 shares at $20 per share highlights significant movements for the company. Although Kenvue will not receive proceeds from this, the offering signifies Johnson & Johnson's strategic exit from Kenvue's ownership. For retail investors, this means Kenvue will operate without its previous parent company's direct influence, potentially leading to a re-evaluation of its market position.

Firstly, the pricing at $20 per share can suggest a stabilizing or confident positioning by stakeholders, aligning with current market trends. However, the absence of direct financial gain for Kenvue might be perceived as a neutral factor in the short term. Debt-for-equity exchange involving major banks like Goldman Sachs and J.P. Morgan indicates confidence in Kenvue's future performance, which should be carefully monitored.

Long-term perspective: This offering might improve Kenvue's market dynamics, allowing for more focused operational strategies without Johnson & Johnson's direct oversight. Investors should watch for Kenvue’s strategic moves post-offering, since this restructuring could either strengthen or challenge their market stance, depending on future management decisions and market conditions.

Market Research Analyst

Market implications of this secondary offering are significant. With 100% of Kenvue's common stock being divested by Johnson & Johnson, Kenvue steps into a new phase of independence. This shift could impact Kenvue's market perception, influencing investor sentiment.

From a market perspective, the involvement of heavyweights like Goldman Sachs, J.P. Morgan and BofA Securities underscores a strong institutional backing. This could be interpreted as a positive indicator of market confidence, potentially attracting more retail and institutional investors.

Investors should consider the psychological impact of Johnson & Johnson's exit. It may prompt speculative movements or volatility in Kenvue's stock price in the short term. However, the new management might leverage this independence to innovate and adapt more swiftly to market demands, potentially enhancing long-term value.

SKILLMAN, N.J.--(BUSINESS WIRE)-- Kenvue Inc. (NYSE: KVUE) (“Kenvue”) announced today the pricing of its previously announced secondary underwritten public offering (the “Offering”) of 182,329,550 shares of its common stock (the “Shares”) at a public offering price of $20.00 per share. The Offering is expected to close on May 17, 2024, subject to the satisfaction or waiver of customary closing conditions. Kenvue is not selling any shares of common stock and will not receive any proceeds from the sale of the Shares in the Offering or from the debt-for-equity exchange (as described below).

In connection with the Offering, Johnson & Johnson (NYSE: JNJ) is expected to exchange the Shares for indebtedness of Johnson & Johnson expected to be held by Goldman Sachs & Co. LLC and J.P. Morgan (collectively, the “Selling Shareholders”). Following the debt-for-equity exchange, if consummated, the Selling Shareholders intend to sell the Shares to the underwriters in the Offering. After the completion of the Offering, Johnson & Johnson will no longer own any shares of Kenvue’s common stock.

Goldman Sachs & Co. LLC, J.P. Morgan and BofA Securities are acting as joint lead book-running managers for the Offering. Citigroup, Deutsche Bank Securities, BNP PARIBAS, HSBC, RBC Capital Markets and UBS Investment Bank are acting as book-running managers for the Offering. Academy Securities, Ramirez & Co., Inc., R. Seelaus & Co., LLC and Siebert Williams Shank are acting as co-managers for the Offering.

A registration statement on Form S-1 relating to these securities has been filed and declared effective by the Securities and Exchange Commission. The Offering is being made only by means of a prospectus forming part of the effective registration statement. A copy of the final prospectus relating to the Offering, when available, may be obtained from Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or by emailing: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by emailing: prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; or BofA Securities, NC1-022-02-25, Attention: Prospectus Department, 201 North Tryon Street, Charlotte, North Carolina 28255, telephone: 1-800-294-1322, or by emailing: dg.prospectus_requests@bofa.com.

This press release is neither an offer to sell nor a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

About Kenvue

Kenvue is the world’s largest pure-play consumer health company by revenue. Built on more than a century of heritage, our iconic brands, including Aveeno^®, BAND-AID^® Brand, Johnson’s^®, Listerine^®, Neutrogena^®, and Tylenol^®, are science-backed and recommended by healthcare professionals around the world. At Kenvue, we believe in the extraordinary power of everyday care and our teams work every day to put that power in consumers’ hands and earn a place in their hearts and homes.

Cautions Concerning Forward-Looking Statements

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about the timing and details of the Offering, the Selling Shareholders’ intent to offer the shares of common stock and the number of shares of Kenvue’s common stock to be held by Johnson & Johnson following the Offering. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates” and other words of similar meaning. Readers are cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Kenvue and its affiliates.

A list and descriptions of risks, uncertainties and other factors can be found in Kenvue’s filings with the Securities and Exchange Commission, including its registration statement on Form S-1, Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other filings, available on request from Kenvue. Kenvue and its affiliates undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514453080/en/

Investor Relations:

Tina Romani (Kenvue)

Kenvue_IR@kenvue.com

Source: Kenvue

FAQ

What is the pricing of Kenvue's (KVUE) secondary offering?

The secondary offering is priced at $20.00 per share.

How many shares are involved in Kenvue's (KVUE) secondary offering?

The offering involves 182,329,550 shares of common stock.

When is Kenvue's (KVUE) secondary offering expected to close?

The offering is expected to close on May 17, 2024.

Will Kenvue (KVUE) receive any proceeds from the secondary offering?

No, Kenvue will not receive any proceeds from the offering.

What happens to Johnson & Johnson's shares after Kenvue's (KVUE) offering?

Johnson & Johnson will no longer own any shares of Kenvue after the offering.