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Johnson & Johnson is reducing its stake in Kenvue by at least 80% with the swap offer

admin — Mon, 24 Jul 2023 15:25:37 +0000

Kenvue, a consumer health business unit of Johnson & Johnson.

CFOTO | Publishing in the future | Getty Images

Johnson & Johnson On Monday, it said it plans to reduce its stake by at least 80% in Kenvue, the consumer health company it founded as an independent company earlier this year, via a stock exchange offering.

J&J owns 89.6% of the common shares of Kenvue, which amounts to more than 1.72 billion shares.

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The exchange offer, also known as a split, will allow J&J shareholders to swap all or a portion of their shares for Kenvue common stock at a 7% discount. It is expected to be tax deductible, J&J said in a statement.

The company indicated that the split is voluntary for investors and is scheduled to close on the third of August. 18, which is much earlier than expected.

J&J said it received a waiver denying the stock lock period associated with Kenvue’s initial public offering in May. This lockout agreement required J&J to wait 180 days to sell any of its stock.

“We believe now is the right time to distribute Kenvue shares, and we are confident that the split is the appropriate path forward to create value for our shareholders,” J&J CEO Joaquín Duato said in a statement.

Duato added that the split will increase J&J’s focus on its pharmaceutical and medical technology businesses — both of which helped the company beat second-quarter revenue and adjusted earnings last week.

J&J first announced its intention to launch a swap offering in its second-quarter earnings report Thursday, but the company provided few details on the plan. Kenvue shares tumbled after that announcement, despite second-quarter results that also beat Wall Street estimates.

When asked about J&J’s planned swap offering Thursday, Kenvue CEO Thibaut Mongon told CNBC’s “Squawk on the Street” that the company is “pleased with the way shareholders have been received for the IPO.”

“We see a great deal of alignment among our new investors in seeing Kenvue’s potential, but I can tell you we’re absolutely ready to leave as a completely independent company,” he said.

Oddity, the beauty and technology company that runs Il Makiage, is going public

admin — Fri, 23 Jun 2023 23:32:50 +0000

Beauty and technology company Oddity, which runs Il Makiage and Spoiled Child brands, filed to go public Friday as the once-frozen IPO market boomed.

The Israel-based company plans to trade on the NASDAQ stock exchange using the ticker ODD. The company did not immediately disclose how the offering would be priced in regulatory filings and declined to comment when asked when the figures would be released.

“The number of shares to be offered and the price range for the proposed offering have not yet been determined. The offer is subject to market conditions, and there can be no guarantee as to whether or when the offer may be completed, or the actual size or terms of the offer,” Oddity said. In a press release.

Launched in 2018 by brother and sister duo Oran Holtzman and Shiran Holtzman-Erel, Oddity uses data and artificial intelligence to develop brands and provide personalized product recommendations to customers.

The company seeks to disrupt a market long dominated by legacy retailers by replacing the in-store experience with product recommendations driven by artificial intelligence and data. At the heart of its business model are its proprietary technology — including technology developed by a former Israeli defense official — and the billions of data points it has collected from millions of users.

In the three months ended March 31, the company generated $165.65 million in revenue, up from $90.41 million in the year-ago period. It reported net income of $19.59 million, or $5.34 per share, compared to $3.01 million, or 82 cents per share, a year earlier.

Numbers disclosed in its regulatory filing show that the direct-to-consumer retailer has been profitable year-over-year since at least 2020.

In fiscal 2022, Oddity brought in $324.52 million in sales and saw net income of $21.73 million, or $5.94 per share. In the prior year, the retailer had revenue of $222.56 million and net income of $13.92 million, or $4.01 per share.

In 2020, it had $110.64 million in sales and $11.71 million in net income, or $3.45 per share.

By comparison, when ELF Beauty It went public in August 2016, and its earnings and sales have been lower than its earnings and sales. ELF, a multi-brand beauty company, saw $144.94 million in sales in fiscal 2014 and a net loss of $2.88 million. The following year, it saw sales of $191.41 million and net income of $4.36 million.

In the 2016 fiscal year, it generated sales of $229.57 million and net income of $5.31 million.

Since going public, ELF sales and profits have skyrocketed. During its most recent fiscal year, which ended March 31, it saw sales of $578.84 million and net income of $61.53 million.

As a direct-to-consumer retailer, Oddity is seeing high margins that come with the strategy. In the three months ended March 31, its gross margins were 71%, up 4 percentage points from 67% in the year-ago period. Its annual margins have declined each year since 2020 as the company has made acquisitions and invested in growing the business.

In 2020, Oddity had an annual gross margin of 70%, and in 2021, it’s down 1 percentage point, to 69%. In 2022, the retailer’s annual gross margin was 67%, down 2 percentage points from the same period last year.

As of March 31, the company had more than 4 million active customers, which it defines as a unique customer account that has made at least one purchase in the previous 12-month period.

“We bring visitors to our website, convert visitors into users by asking and learning about questions, and then leveraging the data we have across the platform to turn them into paying customers,” says a regulatory filing.

Oddity launched internationally, and sales from those markets accounted for about 26% and 27% of its net revenue in 2022 and 2021, respectively. As of Friday, Oddity has launched in the United States, Canada, the United Kingdom, continental Europe, and Australia. She indicated that she has plans to continue to grow that footprint.

The company plans to use the proceeds from the IPO to develop and launch new brands. The funds will also be used for working capital and other general corporate purposes and possibly for acquisitions and other investments.

During an interview earlier this year, the company’s global chief financial officer, Lindsay Drucker Mann, a former CEO of Goldman Sachs, told CNBC that Oddity is making money and growing — even as a challenging macroeconomic environment is proving to be increasingly risky for retailers. Pure digital.

The company said Oddity’s total sales have, on average, doubled every year since 2018.

In Spoiled Child’s first year on the market, the brand new album brought in $48 million in gross sales, which doesn’t include royalties.

In an organizational filing, Holtzman, the company’s CEO and co-founder, said the company recruits from the IDF’s best technology units. Technicians make up more than 40% of the global workforce.

Holtzmann wrote in a letter to its founder, accompanied by the Depository Securities.

“Their lack of investment in technology has left this category behind the digital curve, even though the consumer is inherently willing to buy online — spending significant time on social media for beauty content and dollars quickly shifting online in other categories.”

The company said that in addition to developing new products and brands, Oddity is also trying to make beauty products more effective.

In late April, it announced it was investing more than $100 million to acquire biotech startup Revela and open a lab in the US.

The merger brought to Oddity a team of scientists tasked with creating entirely new molecules, using artificial intelligence, that could be used in its cosmetic brands and future lines.

In 2021, Oddity acquired Voyage81, a computational imaging startup based on AI deep technology founded in 2019 by Niv Price, former head of research and development for one of the IDF’s premium technology units, along with Dr. Boaz Arad, Dr. Rafi Gidron and Omar Schwartz.

The technology is capable of mapping and analyzing skin and hair features, detecting facial blood flow, and creating melanin and hemoglobin maps using a regular smartphone camera.

The filing comes after a year-and-a-half drought in the IPO market, which is just beginning to open up and show signs of green shoots.

Earlier this month, Mediterranean restaurant chain Cava went public, and its shares rose as much as 117% on its market debut.

“[In 2022] Investors didn’t want to go anywhere near IPOs but now they’re making money again, and with issuers seeing they can achieve valuations close to decent, I think that puts people back into the market,” said Matt Kennedy, chief IPO market strategist at Renaissance Capital Company.

“The consumer sector lends itself to these periods where investors can see a business model that they understand, a business that they may be familiar with and also that is usually profitable or close to profitable, preferably one that has growth.”

J&J Spinoff Kenvue has priced its IPO at $22, near the upper end of the expected range.

admin — Thu, 04 May 2023 00:36:30 +0000

Johnson & Johnson products on a shelf in a New York store.

Lucas Jackson | Reuters

Johnson & Johnson Kenvue priced its initial public offering at $22 a share on Wednesday, near the high end of its announced range, in an enlarged deal that should fetch about $3.8 billion.

At this IPO price, the new company would be valued at approximately $41 billion. That makes Kenvue’s debut one of the largest IPOs in the US in over a year.

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The company expected to price 151 million shares between $20 and $23 a share, according to a preliminary prospectus it filed with the Securities and Exchange Commission last week.

Proceeds from the show and any profits from related debt financing transactions will go to J&J, but Kenvue will keep $1.17 billion in cash and cash equivalents.

Goldman Sachs, JPMorgan Chase, and Bank of America are acting as lead underwriters for the IPO.

The shares will begin trading on the New York Stock Exchange on Friday under the symbol “KVUE”.

The spin-off, the largest IPO since Rivian’s November 2021 IPO, may not turn around the once-moribund IPO market, which plunged in 2022. But it could be a sign of life for IPOs in the states United

The debut of Kenvue also marks the largest restructuring in J&J’s 135-year history. J&J announced the split in late 2021 as an effort to streamline operations and refocus on its pharmaceutical and medical device divisions.

Meanwhile, Kenvue is full of household names familiar to investors and the larger public, like Tylenol, Band-Aid, Listerine, Aveeno, Neutrogena, and J&J’s namesake baby powder and shampoo.

Here’s everything else you need to know about this week’s Kenvue IPO.

ownership after the subscription

J&J will control 91.9% of Kenvue after the IPO — or 90.8% if the underwriters exercise their options to purchase additional shares, according to a prospectus filing.

J&J plans to distribute the remaining shares of common stock to its shareholders later this year.

Until then, Kenvue will qualify as a “regulated company” under the New York Stock Exchange’s corporate governance rules, the filing says. This would allow Kenvue to avoid some of the listing criteria, including the requirement that the company’s board of directors be made up of a majority of independent directors.

J&J will generally be able to control matters over which shareholders vote, such as the election of Kenvue board members, according to the lawsuit.

“Johnson & Johnson will continue to control the direction of our business, and concentrated ownership of our common stock may prevent you and other shareholders from influencing important decisions,” Kenvey said in the filing.

Business performance

In the filing, the company said Kenvue is profitable and expects modest growth over the next few years.

Annual sales growth through 2025 is expected to be around 3% to 4% globally, according to the filing.

Kenvue reported sales of $14.95 billion for 2022 and net income of $1.46 billion on a pro forma basis. For the first quarter, which ended April 2, Kenvue estimated that it had sales of $3.85 billion and net income of about $330 million. First quarter results are preliminary.

Ten Kenvue brands generated nearly $400 million or more in sales last year.

Overall, Kenvue said 2022 sales were “well balanced” across the company’s three business divisions.

The company’s self-care unit, which includes eye care, cough and cold products, and vitamins, had net sales of $6 billion for 2022, accounting for 40% of total revenue.

Skin health and beauty products accounted for $4.4 billion in net sales last year, or 29% of all revenue. Among these products are shampoos, conditioners, hair loss treatments, and skin care.

Products in the Essential Health division, including baby products, mouthwashes, dentifrices, health protection and wound care, saw net sales of $4.6 billion, accounting for 31% of total revenue.

The company said in the filing that each of the three divisions was profitable on an adjusted operating income basis.

Kenvue noted that its global footprint is “geographically well balanced,” with nearly half of its 2022 net sales coming from outside North America.

According to the filing, the company’s net debt will be $7.75 billion.

Executive management

Kenvue rounded up several J&J executives to harm the company, according to the report.

Thibaut Mongon, J&J’s executive vice president and global head of consumer health, will be CEO of the new public company. He will also sit at the board.

Paul Roh, J&J’s Chief Financial Officer of Consumer Health and former CEO of PepsiCo, will serve as CFO, and Meredith Stephens, J&J’s global vice president of the company’s consumer health supply chain division, will serve as COO.

Kenvue’s Chief People Officer, Chief Corporate Affairs Officer, Chief Technology and Data Officer, Chief Scientific Officer and group heads for various regions around the world are also from J&J.

The executives will lead a team of more than 22,000 employees in 165 countries and 25 in-house manufacturing sites, according to the preliminary prospectus.

Kenvue’s global headquarters will be in Summit, New Jersey.

Talc cancer lawsuits

J&J faces thousands of claims that baby talcum powder and other talcum products caused cancer. Some of these products fall under the company’s consumer health business.

But Kenvue will only have liabilities for those that arise outside the United States and Canada, according to its initial public offering filing as of January.

“As stated unequivocally and unequivocally, Johnson & Johnson has agreed to retain all talc liabilities — and to reimburse Kenvue for any and all costs — arising from litigation in the United States and Canada,” Eric Haas, vice president of litigation for Johnson & Johnson, said in a statement. statement last week.

But Kenvey said in the filing that “this compensation may not be sufficient” to protect the new company from the full amount of the liabilities.

J&J will continue to fight talc claims in bankruptcy court.

A federal bankruptcy judge in April paused nearly 40,000 lawsuits through mid-June. This decision was part of J&J’s second attempt to settle talc claims in bankruptcy proceedings.

The temporary suspension will give J&J time to try to get court approval for the proposed $8.9 billion settlement with the plaintiffs in the talc cases.

CNBC channel Leslie Baker Contribute to this report.

The report says Johnson & Johnson’s consumer health unit is valued at $40 billion before its initial public offering

admin — Mon, 24 Apr 2023 13:54:57 +0000

Johnson & Johnson logo

SOPA Pictures | Light Rocket | Getty Images

Johnson & JohnsonThe consumer health business is worth $40 billion ahead of its initial public offering later this year, according to a report from The Wall Street Journal.

People familiar with the matter told the magazine that soon-to-be Kinview aims to raise $3.5 billion or more in the bid.

“The stock sale will be by far the biggest of what has yet been a quiet year for IPOs,” the paper noted.

Sources told The Journal that Kinview plans to meet with potential investors as early as Monday.

When asked about the newspaper report, J&J spokesperson Tessia Williams told CNBC, “Unfortunately, I don’t have any information to provide.”

J&J previously said it expected to complete the separation from Kenvue by mid-to-late 2023.

The consumer goods giant also said it would retain majority ownership in Kenvue, with plans to dilute the rest of its stake later in the year.

Kenvue stock will be traded on the New York Stock Exchange under the ticker KVUE.

J&J revealed its plan to spin off its consumer health business in late 2021. This division makes Band-Aid bandages, skin care products under the Neutrogena and Aveeno brands, the pain relief drug Tylenol, and J&J’s baby powder.

J&J still faces thousands of claims that baby powder and other talcum products caused cancer.

A federal bankruptcy judge last week stopped nearly 40,000 lawsuits as of mid-June. This decision was part of J&J’s second attempt to settle talc claims in bankruptcy proceedings.

The temporary suspension will give J&J time to try to get court approval for the proposed $8.9 billion settlement with the plaintiffs in the talc cases.

Kenvue will assume responsibilities related to those originating outside the United States and Canada, according to the IPO filing.