While the parent company’s press release was pretty muted, Halyard’s declaration of independence boasted some more optimism from new Chairman & CEO Robert Abernathy:
Today Halyard Health launches with three decades of industry experience, leading positions in large markets, a diverse portfolio of strong brands and solid cash flow…We are confident about our prospects to deliver growth and value creation to our shareholders as an independent healthcare company focused on innovation.
and a bit more later on:
Halyard’s solutions are designed to address some of today’s most important healthcare needs, such as preventing infection and reducing the use of narcotics, while helping patients recover faster…We will focus on maintaining leading market positions for our diverse portfolio of S&IP products and growing our pain management, digestive and respiratory health medical devices business.
A one time distribution of the excess cash raised as part of its debt offerings (Halyard is keeping ~$40m as per the Form 10) was paid to KMB as part of the transaction.
For those who aren’t aware, the new company’s name is a nautical term referring to the rope used for raising and lowering a sail that ‘propel a ship forward’. I don’t think I can do a better job than the company in explaining its significance:
Halyard suggests progress: our effort to advance health and healthcare by preventing infection, eliminating pain, and speeding recovery. As a word, halyard is distinct, easy to pronounce, and memorable. As a name, Halyard carries many positive connotations and can be a strong metaphor for many aspects of our brand and business:
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As a halyard raises a ship’s sails – we seek to raise the bar and the standards and quality of healthcare
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As a halyard enables acceleration across the water – we strive to accelerate positive change and improvement in our industry
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As a halyard requires teamwork – we believe teamwork is critical to better results and outcomes
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As a halyard is also used to raise a flag for all to see – we are putting a stake in the ground and moving into a new era for our company
Inspiring. What about the new logo?
Just as our name suggests progress, our logo is also powerful symbol for advancement and forward movement. The icon is an abstract letter H for Halyard and also represents the sails of a ship in motion, bringing further connection back to the origin of the name as well as our organization’s purpose. Our primary color, Halyard blue, is a nautical reference symbolizing strength and stability, while bright Halyard green is signifies innovation and technology, a critical piece of our business strategy moving forward. The circular holding shape is a powerful, confident mark, meant to symbolize our global approach and our desire to impact the broader healthcare landscape.
Making use of Halyard Blue – perfect.
The new company generated $1.7b in sales last year, but both sales and EBT have been relatively flat during the 2011-2013 period. Some believe the new company will benefit from the current Ebola crisis and others quoted in that piece believe Halyard’s longer term picture looks bright as well. Shares are basically flat on day 1, but that doesn’t mean much in these situations – it’s not an IPO. As a reminder, the new company will join the S&P Midcap 400, while Kimberly-Clark will remain in the S&P 500.
Finally, as a sign of the difference between spinoffs and highly touted IPOs, the company announced that it would be ringing the closing bell on the exchange…on November 7.
Disclosure: Author holds no position in any stock mentioned.