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Kimberly-Clark eyes spinoff of health unit
November 15th, 2013
DALLAS – The board of Kimberly-Clark Corp. has authorized management to explore a potential tax-free spinoff of the company's health care business.
Kimberly-Clark said Thursday that a spinoff of K-C Health Care would create a stand-alone, publicly traded health care company with about $1.6 billion in annual net sales, with leading market positions in surgical and infection prevention products and medical devices.
"While K-C Health Care has been part of our company since the 1970s, its strategic fit and growth priorities have changed over time, and we now think that pursuing a spin-off makes sense for our shareholders," Kimberly-Clark chairman and chief executive officer Thomas Falk said in a statement. "This move would allow K-C Health Care to optimize its performance and flexibility to pursue its own value-creation opportunities. A spinoff would also allow us to further sharpen our focus on our consumer and K-C Professional brands. This announcement is further evidence of our focus on creating shareholder value and how we use portfolio management to run our company."
K-C Health Care sells surgical and infection prevention products for the operating room and a portfolio of medical devices focused on pain management, respiratory and digestive health. Products are sold primarily under the Kimberly-Clark and ON-Q brand names.
If a spinoff takes place, Robert Abernathy, currently Kimberly-Clark group president for Europe, global nonwovens and continuous improvement and sustainability, would become CEO of the new health care company, according to Kimberly-Clark. Joanne Bauer would continue as Kimberly-Clark president of global health care andwork closely with Abernathy on separation planning and retire when the spinoff is completed, the company added.
"Robert is a seasoned executive with a long track record of success, and I'm confident he will be a terrific leader of the new company," stated Falk. "He is excited about working with the many talented individuals on the health care team to create shareholder value as a stand-alone company."