US IPO Weekly Recap: J&J Spin-Off Kenvue Launches Billion-Dollar Deal In A 1 IPO Week

One small issuer began trading this past week. Six small IPOs submitted initial filings.

The week’s news was led by J&J’s (JNJ) consumer health unit Kenvue (KVUE), which set terms for its $3.3 billion listing on Monday. The company’s IPO would be the largest for US markets in over a year and would more than double IPO proceeds YTD. Kenvue is expected to begin trading in the week ahead.

Fitness equipment brand Interactive Strength (TRNR) priced at the high end to raise $12 million at a $118 million market cap. Doing business as Forme, the company sells home fitness equipment and offers personal training classes, with its connected fitness mirror at the core of its offerings. The company is very small and highly unprofitable. Interactive Strength finished down 17%.

Six IPOs submitted initial filings this past week. Nature Wood Group (NWGL), a Macau-based forestry company with operations in Peru, filed to raise $30 million. Chinese supply chain management provider Majestic Ideal Holdings (MJID) filed to raise $17 million at a $62 million market cap. Hong Kong-based brokerage Solowin Holdings (SWIN) filed to raise $17 million. Chinese office equipment retailer EShallGo (EHGO) filed to raise $15 million at a $116 million market cap. Plant-based snack brand BranchOut Food (BOF) filed to raise $12 million. Chinese medical product maker WORK Medical Technology Group (WOK) filed to raise $10 million.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 4/27/2023, the Renaissance IPO Index was up 11.8% year-to-date, while the S&P 500 was up 8.3%. Renaissance Capital's IPO ETF (IPO) tracks the index, and top ETF holdings include Snowflake (SNOW) and Airbnb (ABNB). The Renaissance International IPO Index was down 5.4% year-to-date, while the ACWX was up 8.3%. Renaissance Capital’s International IPO ETF (IPOS) tracks the index, and top ETF holdings include Porsche and JD Health.

Week Ahead

For the first time since early March, there’s a large IPO on the calendar for the week ahead: Kenvue is slated to raise $3.3 billion at a $40.6 billion market cap, which would be the largest US IPO since late 2021 and would more than double IPO proceeds year-to-date. As usual, some small issuers may join the IPO calendar late.

Being spun out of Johnson & Johnson, consumer health giant Kenvue offers a portfolio of well-known brands like Tylenol and Listerine and serves over a billion people across more than 165 countries. The company is mature and highly profitable, and it plans to pay a quarterly dividend with a 3.7% annualized yield at the midpoint. The company has spent the last several years optimizing its business and even mentions AI among the areas of investment for enhancing its digital capabilities. Kenvue's IPO proceeds, as well as $9 billion of new debt issuance, will be paid to J&J as part of the separation.

Street research is expected for three companies in the week ahead.

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