United States securities and exchange commission logo
September 28, 2022
Thibaut Mongon
Chief Executive Officer
Kenvue Inc.
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
Re: Kenvue Inc.
Draft Registration
Statement on Form S-1
Submitted August
30, 2022
CIK No.: 0001944048
Dear Mr. Mongon:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted August 30, 2022
Cover Page
1. Please revise the cover
page to disclose the percentage of shares Johnson & Johnson will
continue to own after
the offering, as disclosed in the risk factor on page 51 and elsewhere
in the prospectus,
rather than merely stating the company will hold a majority.
About this Prospectus, page iii
2. We note your statements
on page iv that you have not independently verified third-party
information and your
information has not been verified by any independent source. It is
not appropriate to
directly or indirectly disclaim liability for statements in your
registration statement.
Please revise or specifically state that you take liability for these
Thibaut Mongon
FirstName
Kenvue Inc.LastNameThibaut Mongon
Comapany 28,
September NameKenvue
2022 Inc.
September
Page 2 28, 2022 Page 2
FirstName LastName
statements.
Prospectus Summary, page 1
3. Please revise your Summary section to ensure that the information you
include in your
summary is balanced. For example, your discussion of your "iconic
brands" should be
balanced with a discussion regarding the competition you face, as you
discuss on page 88,
that holding a leading market share position for a particular product
could still mean you
possess a small share of the overall market, as you further explain on
page 19, and that
you will no longer be able to capitalize on the Johnson & Johnson
brand as you rebrand
your company as part of the Separation. To the extent that you cite
strengths in your
summary, please review each one and revise as necessary to provide
balanced information
that is of equal prominence, rather than listing brief and generalized
risk factors at the end
of this section. Your reference to product recalls in the summary
should also specifically
mention your 2021 recall of all lots of five Neutrogena and Aveeno
aerosol sunscreen
product lines, and your discussion of legal proceedings related to
talc or talc-containing
products should briefly explain the claims underlying such proceedings
and that you
presently sell talc-based Baby Powder in certain markets outside the
U.S. and Canada.
You should also explain that the indemnity from Johnson & Johnson for
claims from the
U.S. and Canada may not be sufficient to protect you. In addition,
disclose that you will
be a holding company that will rely on your subsidiaries for cash
after the transaction.
4. Please revise to substantiate the following claims or otherwise revise
or remove them:
you help and empower "an estimated 1.2 billion people live
healthier lives every day,
from their very first day;" and
that your consumers have an emotional connection to your products
"and a deep
association of care and well-being that fosters lifelong loyalty
to [y]our brands."
5. We note the risk factor disclosure on pages 48-57. Clarify what
aspects of the transfer of
assets, liabilities and contracts from Johnson & Johnson to the
company will not be
complete upon the closing of this offering, and what aspects of your
relationship will be
ongoing, such as your tax consolidation, tax matters agreement, and
joint and several tax
liability addressed on page 57, your uncapped indemnification
obligation addressed on
page 56, and similar matters. These should be addressed prominently in
the summary, the
summary risk factors and in more detail in an appropriate section of
your document. Also
revise to further clarify the time frame for rebranding "following
completion of this
offering" as noted on page 51.
6. We note your statements throughout the summary and other sections of
your prospectus
regarding the efficacy of your products, including the efficacy of
Listerine and Baby
CottonTouch Wash and Lotion. Please revise your Summary to explain
which of your
products' efficacy and safety claims have been approved by the FDA or
similar regulatory
authorities, and that efficacy or safety claims for your other
products have not been
approved by regulatory authorities.
Thibaut Mongon
FirstName
Kenvue Inc.LastNameThibaut Mongon
Comapany 28,
September NameKenvue
2022 Inc.
September
Page 3 28, 2022 Page 3
FirstName LastName
Debt Financing Transactions, page 10
7. Please revise to quantify the amount of financing arrangements into
which you intend to
enter, and specify any restrictions that will be imposed on you and
your operations by
such financing arrangements.
Summary of Risk Factors, page 11
8. Please revise the summary risk factors to briefly state the principal
factors that make an
investment in the company or this offering speculative or risky. For
example, clarify the
risk associated with "[y]our ability to successfully expand [y]our
global operations" and
"[y]our ability to resolve favorably legal proceedings to which [you]
are subject or may
become subject in the future."
Risks Related to This Offering and Ownership of Our Common Stock
Our amended and restated certificate of incorporation will provide that certain
courts within the
State of Delaware . . . , page 63
9. Please revise this risk factor to disclose that there is also a risk
that your exclusive forum
provision may result in increased costs for investors to bring a
claim.
Cautionary Note Regarding Forward Looking Statements, page 65
10. You caution potential investors not to rely on these
forward-looking statements.
Although you may caution investors about the uncertainties inherent in
such information,
investors are entitled to rely on the disclosure in your document.
Please revise this
statement to clarify. Also revise the disclosure on page 67 to clarify
that you have
summarized all material risks in the risk factors, rather than
certain risks, and revise the
risks factors accordingly.
Capitalization, page 70
11. Please revise the Capitalization table to include a separate column
for actual, as adjusted
to give effect to the matters noted in the pro forma column, except
the estimated offering
proceeds, and a separate pro forma column for the estimated offering
proceeds.
Liquidity and Capital Resources, page 100
12. Revise this section to more specifically address the debt to be
incurred with the offering
and the anticipated sources of funds to be used for repayment.
Inflation Risk, page 103
13. You state that you have experienced the effects of inflation, and that
you may not be able
to fully offset such higher costs through price increases if your
costs continue to be subject
to significant inflationary pressures. Please revise to explain the
extent you have been able
to offset the effects of inflation through price increases.
Thibaut Mongon
FirstName
Kenvue Inc.LastNameThibaut Mongon
Comapany 28,
September NameKenvue
2022 Inc.
September
Page 4 28, 2022 Page 4
FirstName LastName
Intellectual Property, page 137
14. Please revise your intellectual property disclosure to provide a more
specific discussion
of the type of patent protection on which you rely for for each
material product or product
family, including a discussion of expiration dates and jurisdiction.
Please explain whether
you license any patents for any material product or product family.
15. We refer to your statement that you will be permitted to use the
Johnson & Johnson
name and signature and other legacy Johnson & Johnson branding for a
limited duration
following the Separation. Please revise to specify the duration.
Certain Relationships and Related Party Transactions, page 192
16. Please disclose in greater detail the contractual obligations and
responsibilities of both you
and Johnson & Johnson, and the financial terms of each of the
agreements you intend to
enter into prior to or concurrently with the completion of the
offering, as those agreements
become available prior to effectiveness. Clarify which form of
related party agreements
in the Exhibits index will be replaced with final, signed agreements
in a pre-
effective amendment and which will not be finalized prior to
effectiveness.
Report of Independent Registered Public Accounting Firm, page F-2
17. We note the draft language at the top of page F-2 regarding the change
in composition of
reportable segments. Please confirm that your auditors will remove
this paragraph prior to
the company going effective and sign and date the report as deemed
appropriate. In your
next amendment, please have your auditors sign the audit report on
page F-4.
9. Related Parties, page F-26
18. Please revise to separately quantify each of the costs allocated from
the parent and to
disclose the methodology used in the allocation of these costs.
13. Commitments and Contingencies, page F-32
19. We note the disclosures on page F-35 of the class actions filed in the
United States and
Canada related to certain Neutrogena and Aveeno sunscreen products and
Zantac,
respectively, as well as the risk factor disclosure on page 37
regarding product recalls,
please further discuss and quantify the impact that such recalls had
on your financial
statements for the periods presented.
15. Segments of Business and Geographic Areas, page F-36
20. We note the subcategories of each operating and reporting segment as
listed on pages 4,
85 and F-10. Given this information and that previously, your three
segments were
reflected as six product groupings forming the Consumer Health segment
of Johnson
& Johnson, please explain to us how you considered the guidance in ASC
280-10-50- 40
related to information about products and services.
Thibaut Mongon
Kenvue Inc.
September 28, 2022
Page 5
General
21. We note the risk factor disclosure on page 50. It appears from the
disclosure on pages 50
and 196-97 that you are relying on the fact that the Separation and
potential Distribution
are not taxable, and that there otherwise could be significant tax
obligations. Please revise
the summary and an appropriate section of this document to discuss the
material U.S.
federal income tax consequences and provide a tax opinion in accordance
with Regulation
S-K, Item 601(b)(8), or advise.
22. Please provide us with copies of all written communications, as defined
in Rule 405 under
the Securities Act, that you, or anyone authorized to do so on your
behalf, present to
potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they
retain copies of the communications.
You may contact Jenn Do at 202-551-3743 or Brian Cascio at 202-551-3676
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Abby Adams at 202-551-6902 or Dorrie Yale at 202-551-8776 with any other
questions.
Sincerely,
FirstName LastNameThibaut Mongon
Division of
Corporation Finance
Comapany NameKenvue Inc.
Office of Life
Sciences
September 28, 2022 Page 5
cc: Michael E. Mariani, Esq.
FirstName LastName