Kimberly-Clark may pursue spin-off of health care division

Chairman and Chief Executive Officer Thomas J. Falk said, "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. 

"This move would allow K-C Health Care to optimize its performance and flexibility to pursue its own value-creation opportunities.  A spin-off 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."   

Robert E. Abernathy, currently Kimberly-Clark Group President — Europe, Global Nonwovens, and Continuous Improvement and Sustainability, will become chief executive officer of the new health care company if the spin-off ultimately occurs. 

Abernathy joined Kimberly-Clark in 1982 and has held senior management positions throughout the company, including having overall responsibility for K-C Health Care from 1997 to early 2004.  Joanne B. Bauer will continue as Kimberly-Clark President — Global Health Care, work closely with Robert Abernathy on separation planning and retire when the spin-off is completed.

"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," said 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."

Potential Transaction Details

Company management will continue to analyze a potential spin-off and expects to make a final recommendation to the board of directors in the next several months.  If the board approves a spin-off, a transaction would likely be completed by the end of the third quarter of 2014, subject to market, regulatory and other conditions. 

The company expects that the spin-off would be in the form of a tax-free distribution of 100 percent of the new company's common stock to Kimberly-Clark shareholders.  Morgan Stanley has been retained to assist Kimberly-Clark in the pursuit of the spin-off.

Information about K-C Health Care

K-C Health Care sells surgical and infection prevention products for the operating room and a portfolio of innovative medical devices focused on pain management, respiratory and digestive health. 

The business has the number one or number two market position in several product categories in the United States, including sterilization wrap, face masks, surgical drapes and gowns, closed suction catheters, pain pumps and enteral feeding tubes.  K-C Health Care is a global leader in education to prevent healthcare-associated infections.  Products are sold primarily under the Kimberly-Clark and ON-Q brand names.

Kimberly-Clark