Kimberly-Clark Corporation (NYSE: KMB) announced the record date, distribution date and distribution ratio for the previously announced tax-free spin-off of its health care business. The spin-off will form the new publicly traded company, Halyard Health, Inc. Kimberly-Clark also increased its 2014 share repurchase program to take into account expected proceeds as a result of the spin-off.
Photo: Thomas J. Falk, chairman and chief executive officer of Kimberly-Clark Corp.
Kimberly-Clark shareholders will receive one share of Halyard Health common stock for every eight shares of Kimberly-Clark common stock held as of the close of trading on Oct. 23, 2014, the record date for the spin-off. Kimberly-Clark shareholders will receive cash in lieu of any fractional shares. The spin-off is expected to be effective as of the end of the day on Oct. 31, 2014, the distribution date for the spin-off, with 100 percent of the shares of Halyard Health distributed to Kimberly-Clark shareholders.
Before completion of the spin-off, Halyard Health expects to make a one-time cash payment to Kimberly-Clark. As a result, Kimberly-Clark is increasing its 2014 share repurchase target to $2 billion, up from its previous plan of $1.3 to $1.5 billion.
"The spin-off will let Halyard Health pursue its own value-creation opportunities as a focused healthcare company," said Thomas J. Falk, chairman and chief executive officer of Kimberly-Clark Corp. "Looking ahead, we continue to be optimistic about our prospects to deliver strong returns to shareholders through successful execution of our Global Business Plan."
Halyard Health has applied to list its shares on the New York Stock Exchange (NYSE) under the symbol "HYH." Kimberly-Clark expects that a "when-issued" public trading market for Halyard Health common stock will begin on the NYSE on or about Oct. 21, 2014, under the symbol "HYH WI" and will continue through the distribution date. Halyard Health common stock is expected to begin "regular way" trading on the NYSE on Nov. 3, 2014, the first trading day following the distribution date.
No action is required by Kimberly-Clark shareholders to receive shares of Halyard Health common stock in the spin-off. Beginning on or about Oct. 21, 2014, through the distribution date, it is expected that there will be two ways to trade Kimberly-Clark common stock — either with or without the right to receive Halyard Health common stock in the spin-off. Investors are encouraged to consult with their broker and financial and tax advisors regarding the specific implications of buying or selling Kimberly-Clark common stock on or before the distribution date.
The spin-off and the distribution of Halyard Health stock is subject to the U.S. Securities and Exchange Commission (SEC) having declared effective Halyard Health's registration statement on Form 10. In addition, the spin-off is subject to conditions set forth in a Distribution Agreement between Kimberly-Clark and Halyard Health, the form of which is filed as an exhibit to Halyard Health's registration statement on Form 10.
(Kimberly-Clark Corp.)