Health care business sticks with North Fulton

Halyard Health at a glance

  • The company: The soon-to-be independent health care spin-off of Kimberly-Clark has about 16,500 employees worldwide and makes about 100 products, including medical exam gloves, gowns, surgery masks, pain management systems and catheters. The health care division reported about $1.7 billion and net income of $154.6 million in 2013.
  • Management: The senior management team is made up of Kimberly-Clark veterans. Chairman and CEO Robert Abernathy, 59, has formerly managed several corporate divisions, including the health care business from 1997-2004.
  • When and where: The spin-off is expected to close later this year, and Halyard Health is expected to be listed on the New York Stock Exchange. The company plans to move into new offices in Alpharetta by early next year.

Source: Halyard Health

Metro Atlanta will get another major corporate headquarters after consumer products giant Kimberly-Clark spins off its health care business later this year.

Halyard Health, the company that will emerge from the Fortune 500 maker of Huggies and Kleenex, announced Tuesday it will base its corporate offices in Alpharetta, not far from its current home at Kimberly-Clark’s massive wooded campus in Roswell.

The newly independent Halyard also plans to hire 150 to 200 new employees locally in the next two years, Chairman and CEO Robert Abernathy told The Atlanta Journal-Constitution.

The decision to stay in metro Atlanta is a boost for the region’s life sciences industry. Georgia is home to about 400 companies in the field, most of them smaller than Halyard.

Halyard is expected to become independent later this year and move into its new offices by the first quarter of next year. The jobs will be largely high-paying corporate finance, legal, research, compliance, information technology and management positions.

“We’re invested in the community. The community has supported us throughout the years (and the) risk of losing top talent was just too great” for the company to leave metro Atlanta, Abernathy said.

Dallas-based Kimberly-Clark announced in November it planned to spin off its health care business. At the time, Kimberly-Clark CEO Thomas Falk said the move would allow his company to focus on its core consumer products.

Kimberly-Clark shareholders will receive stock in the new firm, which is expected to trade on the New York Stock Exchange. Kimberly-Clark will receive cash as part of the plan.

But Kimberly-Clark officials at the time did not address the new company’s future in metro Atlanta: a question now settled.

“Kimberly-Clark has found access to a solid health care network, including a skilled talent pool,” state economic development chief Chris Carr said in a news release. “Without a doubt, Halyard Health will also find the support it needs to lead the industry toward success.”

Depending on the number and type of jobs added after it becomes independent, Halyard could qualify for quality jobs tax credits and opportunity zone tax credits potentially worth millions of dollars over several years.

The health care division employs about 450 in North Fulton, and that figure will grow to about 650 as the firms separate, Abernathy said. The new company will base its research and development operations in Alpharetta as well.

“We want to focus on accelerating the growth of our medical device products,” Abernathy said, who also said Halyard could be active in acquiring other companies once it’s independent.

Halyard has about 16,500 employees worldwide and will make about 100 products, including medical exam gloves, gowns, surgery masks, pain management systems and catheters. Halyard will have 12 manufacturing sites, including two in the U.S.

The name is a nautical term for the rope or tackle used to hoist or lower sails, which Abernathy said “is indicative of the new company as we set out on our own direction.”

On Tuesday, Halyard released information to investors with a regulatory filing with the Securities and Exchange Commission.

The health care division and had net sales of about $1.7 billion and net income of $154.6 million in 2013, figures that nearly matched 2012 results. The new firm will also rank among the 100 largest global medical technology companies, Abernathy said, and its revenue will likely put it in striking distance of being in the Fortune 1000.

In the first quarter, the division reported $397 million in net sales, flat compared to the period a year earlier. Operating profit from the division was $72 million the first 90 days of this year, an increase of about 64 percent over the year-ago quarter, mainly because of lower spending on marketing and research and other cost reductions.

The company said the sales volume of medical devices was up, including pain management and digestive health products, while surgical and infection prevention sales volumes were down slightly.

The new company’s corporate hub will be based at 5405 Windward Parkway, Abernathy said.

Separately, Kimberly-Clark will consolidate operations from around the metro area at its Roswell campus, helping fill the void there after the health care business moves, Abernathy said.