Kimberly-Clark said on Thursday that it would pursue a potential spin-off its health care business, becoming the latest company to slim down its operations to help bolster its stock price.
The business that would be separated focuses on selling surgical and anti-infection products and medical devices for pain management, respiratory and digestive health. It reported $1.6 billion in sales last year, a fraction of Kimberly-Clark’s $21.1 billion in revenue.
“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,†Thomas J. Falk, Kimberly-Clark’s chairman and chief executive, said in a statement.
Kimberly-Clark would be making the move from a position of relative strength: its stock has risen about 30 percent so far this year, closing on Thursday at $109.71. (In after-hours trading, the company’s shares jumped 6.4 percent to $116.75.)
If the company’s board authorizes the move, the health care unit would likely be publicly traded by the third quarter of 2014.
Kimberly-Clark is being advised by Morgan Stanley.
