After the transaction, the British based company intends to focus on its health and hygiene portfolio which continues to grow at a healthy clip. As part of this focus, the company recently purchased the K-Y brand from Johnson & Johnson (JNJ). The company also owns several other famous brands such as Durex, Lysol and Clearasil.
According to the WSJ (and others) analysts are valuing the unit between $1 and $4b, a relatively small unit within the overall company. Many suspect that the demerger effort is a result of failing to find a buyer, but finance officer Adrian Hennah denied this. The unit will continue to be run by Shaun Thaxter who noted that, “addiction is a structurally strong marketplace…It is not going away anytime soon.’ True, but without the product it might be tough to get more involved in the space. Mr. Thaxter hinted that this might be overcome as a result of the spinoff noting that he believes ‘that RBP will be a more attractive partner for business development opportunities as a stand-alone and separately managed entity.’
The new company is expected to be listed in London and the parent company has yet to decide whether or not it will retain a stake. The spin is expected to be completed sometime over the next 12 months, but I would bet it happens sometime in 2015.
Disclosure: Author holds no position in any stock mentioned.