Kimberly-Clark's ($KMB) spinoff of its $1.6 billion healthcare business is scheduled to occur Nov. 1 with the launch of newly independent company Halyard Health.
"One of the benefits of the spinoff for Halyard is that we will be able to independently set our own direction and re-invest more appropriately in the business for growth. As a result, I think across our portfolio, we will be able to accelerate our growth," said future COO Chris Lowery in an interview with MassDevice.
During the interview he emphasized the company's strength in pain management solutions, saying "we really focus on narcotic reduction. You have pain management in a non-narcotic fashion. Narcotics is really an epidemic here in the U.S. It is the leading cause of adverse drug event deaths and there is great opportunity in those pain platforms to really help our customers at the intersection of cost, quality and outcome." He pointed to the On-Q pain pump as an example, saying that there are 100 studies that demonstrate its economic value to the healthcare system.
The business also focuses on surgical and infection protection, surgical solutions, respiratory health and digestive health products, according to Kimberly-Clark website. The infection protection business--which accounts for about 70% of the unit's revenue, according to Forbes--will be in a separate division from the others. Another focus is providing services designed to reduce hospital-acquired infections and lower readmissions, Lowery told MassDevice.
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| Kimberly-Clark's On-Q pain pump |
North America accounts for 70% of the unit's revenue, Forbes says.
The spinoff only adds to the dizzying array of moves made by companies as the device industry reorganizes and consolidates. But Halyard will be a willing participant in the M&A game, Lowery said: "In fact, part of our growth strategy moving forward will be to look at M&A as a source for future growth. We think we will be better positioned to attract healthcare talent and have a better opportunity to allocate capital for growth-related activities, whether it be an increase in R&D spending, or mergers & acquisitions."
Kimberly-Clark (famous for its Kleenex tissues) announced plans to spin off the healthcare unit last November, saying that the division's strategic fit and changed growth priorities made it better suited as an independent business. The healthcare business accounts for about 8% of the parent company's revenues.
Halyard will be listed on the New York Stock Exchange under the ticker symbol "HYH."
- read the MassDevice interview
- here's the article in Forbes
Editor's Note: This story has been corrected. It previously said that the company was being listed on the Nasdaq.