Breaking up isn’t so hard to do, after all. Just two years after spinning off its consumer products as Kenvue Inc., Johnson & Johnson aims to part ways with its orthopedics unit, which will take with it the Depuy Synthes name first created when Synthes Inc. married into the J&J Depuy ortho unit in 2012 for a tidy sum of $19.7 billion. Depuy was itself acquired in 1998.

The New Brunswick, N.J.-based med-tech giant said Depuy Synthes would be the largest and most comprehensive orthopedics company in the world, with more than $9.2 billion in sales in 2024, about 10% of J&J’s total revenue. Depuy Synthes serves about 7 million patients each year in a market that J&J estimates to present a $50 billion opportunity.

For all the positives, the orthopedics unit has not had great margins. “Management noted on today's call that it expects this spin to be growth accretive to J&J remainco, suggesting to us that management doesn't see its orthopedics business as a +5% to 7% long-term growth (5% to 7% growth is multi-year long-range plan J&J has discussed previously for the overall company),” said Jeff Johnson and David Rescott, senior analysts with Baird Medtech Research. “That's not overly surprising as we believe 5% is likely close to accurate for long-term overall orthopedic market growth and J&J has been undergrowing the market for many years.”

J&J said it would “explore multiple paths” for the separation, expected to occur in 18 to 24 months, though the split is most likely to take the form of a spin-off, a la Kenvue, management noted in an investor call.

In preparation for the split, J&J named Namal Nawala worldwide president of Depuy Synthes, effective immediately. Nawana most recently served as executive chairman and founder of consumer diagnostic technology company Sapphiros and was previously CEO of Smith & Nephew plc and president and CEO of Alere Inc. He definitely has the backbone for the new job, as he also brings 15 years with J&J where his last role, fittingly enough, was worldwide president of the Depuy Synthes spine business.

“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said J&J Chairman and CEO Joaquin Duato. “The planned separation reflects our long-standing commitment to portfolio optimization and value creation. We are confident that our orthopedics business will be better positioned to improve top-line growth and operating margins as a standalone business.”