This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Deal: Kimberly-Clark Hires Morgan Stanley to Spin-off Healthcare Unit

NEW YORK ( TheStreet) --  Kimberly-Clark (KMB - Get Report) has retained Morgan Stanley (MS) to help the paper-products maker spin-off its health care operations.

Dallas-based Kimberly-Clark, maker of Huggies diapers, Depend undergarments and Kleenex tissues, said a spinoff would allow it focus on its consumer and professional brands. The healthcare business, which makes surgical and infection prevention products and medical devices, as a standalone would have about $1.6 billion in annual sales.

Kimberly-Clark overall generates about $21 billion in annual revenue. The health unit, which is based in Roswell, Ga., employs 16,000 and generates about 70% of its sales from North America.

The company said the spinoff, which if approved by the board is expected to be completed by the end of the third quarter of 2014, would be designed to be tax-free to shareholders and would create an independent publicly traded company.

"While K-C Health Care has been part of our company since the 1970's, its strategic fit and growth priorities have changed over time and we now think that pursuing a spin-off makes sense for our shareholders," said Kimberly-Clark chairman and CEOThomas J. Falk. "This announcement is further evidence of our focus on creating shareholder value and how we use portfolio management to run our company."

Falk said that the spin would allow the health business to streamline its operations and give it the "flexibility to pursue its own value-creation opportunities." The executive told television reporters Friday morning that Kimberly-Clark would be open to a sale of the health business instead of a spinoff, but noted the unit has a low tax base that makes a spinoff more appealing.

Post-deal, Robert E. Abernathy, who currently runs Kimberly-Clark's Europe and global nonwovens operations, will be CEO of the health unit. Abernathy has been with Kimberly-Clark since 1982 and ran the health business from 1997 to 2004. --By Lou Whiteman in Atlanta.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
KMB $106.37 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs