The consumer health spin-out from Johnson & Johnson (JNJ:NYSE), Kenvue (KVUE:NYSE) enjoyed a positive stock market debut on 4 May, with shares in the company surging 22% to $26.90 in a move valuing the business at about $50 billion.

Behind iconic brands rooted in science including Listerine mouthwash, Tylenol painkillers and Band-Aid adhesive bandages, Kenvue raised $3.8 billion at $22 a share – the issue was priced at the higher end of the $20 to $23 targeted range – in what is the biggest US initial public offering (IPO) since American electric vehicle maker Rivian (RIVN:NASDAQ) came to market in late 2021.

Bulls are hoping Kenvue’s successful listing could mark the start of a thawing of the US IPO market, which largely froze over last year as rising interest rates and stock market and economic uncertainty sapped risk appetite; the likes of ARM, Instacart, Reddit, Klarna and Stripe are among a long line of names keen to test investor appetite for Stock market listings.

WHO IS KENVUE?

Kenvue’s debut marks the largest restructuring in Johnson & Johnson’s 135-year history as the company seeks to refocus on its medical device and pharmaceutical divisions.

The demerged Kenvue’s brand portfolio also includes the likes of Neutrogena, Benadryl, Calpol, Rogaine and Johnson & Johnson’s namesake baby powder products, the latter subject to legal battles over whether they cause cancer.

Kenvue is already profitable and plans to pay a $1.5 billion annual dividend. According to a prospectus filed with the Securities and Exchange Commission, Kenvue generated sales of $15 billion in 2022 with net income of $1.46 billion on a pro forma basis, and expects annual sales growth through 2025 to be about 3% to 4% globally.

Johnson & Johnson will continue to own over 90% of the shares and has agreed to shield Kenvue from baby power-related legal costs in the US and Canada, although one risk to weigh is the fact the spin-out is facing claims relating to sales in other countries.

A ‘NEW VIEW OF CARE’

Kenvue’s CEO Thibaut Mongon commented: ‘As a global leader at the intersection of healthcare and consumer goods, our carefully curated portfolio of science-backed, iconic brands has been trusted by consumers and recommended by healthcare professionals for generations. We are ready to bring a new view of care to the world.’

The carve-out of Kenvue continues a recent trend of corporate demergers including last summer’s spin-off of rival consumer health colossus Haleon (HLN), the maker of Panadol, Sensodyne, Advil, from UK-listed drugs and vaccine giant GSK (GSK).

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