Kimberly-Clark Corp. (NYSE: KMB) has reconfirmed its previously announced plan to spin off its health care business. The company’s Registration Statement has been filed with the Securities and Exchange Commission. The new company will be called Halyard Health Inc., with its headquarters in Alpharetta, Ga. After the spin-off is completed later in 2014, Halyard Health will be a stand-alone public company listed for trading on the New York Stock Exchange.

This spin-off has received little coverage, but it is a substantial transaction for special situation investors. It is also one that does not seem riskless when you look at the sizes of the companies.

Halyard Health has revenues of roughly $1.7 billion annually, versus $21 billion for all of Kimberly-Clark. Kimberly-Clark’s management also said that Halyard holds leading market positions in both surgical and infection prevention products and medical devices. It employs approximately 16,500 employees, versus about 57,000 for the whole of Kimberly-Clark.

As seen with most spin-offs, this is expected to be a tax-free distribution. It also will be a 100% spin-off of Halyard Health common stock directly to Kimberly-Clark shareholders.

There is a bit of a trust factor here. It was shown that the distribution ratio will be determined shortly before the spin-off occurs and will be completed at the end of the third quarter or in the fourth quarter of 2014.

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Kimberly-Clark will receive a cash distribution from Halyard Health prior to the spin-off in an amount to be determined and will use the cash to repurchase its common stock.

Kimberly-Clark is about to be a more-focused consumer products company. Its current market cap is $41.6 billion, and at $110.40 its shares have traded in a 52-week range of $91.44 to $113.09. Its dividend yield is now down to about 3% since its shares have risen handily.

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