Johnson & Johnson's Kenvue IPO to command valuation of more than $40 billion in biggest public debut since 2021

By Jeremy C. Owens

Upsized offering for unit that includes name brands such as Band-Aid, Tylenol and Listerine priced at $22, near the top of the range, to raise $3.8 billion

A unit of Johnson & Johnson is headed for the biggest initial public offering in more than a year after its shares were priced near the top of the expected range Wednesday evening.

Johnson & Johnson (JNJ) will charge $22 a share in the IPO for Kenvue, the companies said in a statement Wednesday evening. Kenvue , which is expected to begin trading Thursday morning on the New York Stock Exchange, under the ticker "KVUE," will hold a wealth of consumer brands that includes Band-Aid, Tylenol and Listerine.

Johnson & Johnson sold 172.8 million shares at that price, up from previous expectations of 151.2 million shares, after stating a potential pricing range of $20 to $23. At the $22 price, Johnson & Johnson raised more than $3.8 billion at a valuation topping $41 billion, and those numbers could rise -- the underwriting banks have access to an additional 22.7 million shares for overallotments.

That means the Kenvue IPO will raise more than every other IPO that has made it to market thus far in 2023 collectively, and more than any individual IPO since late 2021. According to Renaissance Capital data, just 40 IPOs have priced this year, and they raised about $2.4 billion in total.

The stock is expected to begin trading on the New York Stock Exchange some time after the open bell.

A deep freeze in the IPO market began last year, after a spate of SPACs -- special-purpose acquisition companies, also known as blank-check companies -- led to record activity in 2021. Just 71 IPOs or direct listings with an initial valuation of $50 million or more made it to market in 2022, according to Renaissance Capital, after 397 such deals in 2021.

For more: The IPO market froze in 2022. Here's what's needed for it to thaw in 2023

A successful IPO for Kenvue could lead to other established companies going forward with public offerings. Arm Ltd., a British chip maker owned by Japan's SoftBank Group Corp. that was expected to go public after a deal with Nvidia Corp.(NVDA) fell through last year, recently filed paperwork confidentially for an offering.

J&J will continue to own about 92% of Kenvue and plans to distribute the remaining shares to its own shareholders in a deal that may come in the second half of the year. Goldman Sachs, JPMorgan and BofA Securities are lead underwriters in a team of 19 banks working on the deal.

MarketWatch staff writer Ciara Linnane contributed to this article.

-Jeremy C. Owens

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05-04-23 0909ET

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