Pfizer’s NYSE: PFE Animal Health Spin off Zoetis NYSE:ZTS Came out Strong
Pfizer’s NYSE: PFE Animal Health Spin off Zoetis NYSE:ZTS Came out Strong
SNY, LLY, MRK
Zoetis Inc. the spin-off of the animal health business from Pfizer Inc held its IPO Friday. The company offered 86.1-M shares at 26, 1.00 above the estimated range of 22 to 25.
Pfizer retains about 83% of the company’s stock, which would shrink to about 80% if underwriters exercise their over allotment options in full.
Zoetis will receive none of the $2.2-B proceeds from the offering, all of which will go to a debt-for-equity exchanges with some underwriters to pay down Pfizer debt.
Pfizer also indicated that following the IPO it may distribute all or part of its stake in Zoetis to Pfizer shareholders in a tax-free distribution either as a one-time dividend or a share exchange, or both.
The new company expects annual sales of around $4.2-B and is the largest firm in the animal health industry.
Some 6% of its sales come from products and services for livestock.
The company has operations in 60 companies and competes with in-house animal health units of several big drugmakers, including Sanofi NYSE: SNY, Eli Lilly and Co. NYSE: LLY and Merck & Co. NYSE: MRK.
Shares of Zoetis are up nearly 19%, at 30.85 after hitting a high of 31.50 on the 1st day of trading. Pfizer’s shares are up to 27.80, near the top of the stock’s 52-wk range of 20.75 to 28.84
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