Pfizer's former business unit, which was renamed Zoetis Inc. in June 2012, priced its IPO of 86.1 million shares of common stock at $26 per share — $1 above the high end of the company's estimated $22 per share and $25 per share range, according to its U.S. Securities and Exchange Commission filings.
Those shares opened on the stock exchange today at $31.50 per share — up approximately 21 percent from Zoetis's offer price.
Following the IPO's completion, Zoetis — which manufactures and markets veterinary medicines and vaccines for livestock and domestic animals — will not receive any of the proceeds.
Pfizer will sell approximately 17 percent of the animal health business in the IPO, though the drugmaker said underwriters have the option to buy up to 12.95 million more shares, which would reduce its ownership stake to approximately 80.2 percent.
"With the Zoetis initial public offering, we are creating the largest standalone company fully devoted to animal health medicines and vaccines," Pfizer Chairman and CEO Ian Read said in a statement. "For Pfizer, we are better positioned to focus on our core business as an innovative biopharmaceutical company, by unlocking value from the animal health business that will return value to Pfizer shareholders."
In July 2011, Pfizer said it was considering a spinoff, sale or other arrangement for its animal health and nutrition businesses in order to focus on its prescription pharmaceuticals unit. In April 2012, the drugmaker announced Nestle would acquire its nutrition arm, and the $11.85 billion sale was completed Nov. 30.
For its animal drug unit, Pfizer looked for buyers but then opted to go the spinoff route, and on Aug. 10, 2012, the company announced plans to sell up to 20 percent of its animal health spinoff in an IPO, according to an SEC filing by Zoetis. Four days later, the business unit was approved for a $9.2 million Business Employment Incentive Program grant by the state Economic Development Authority's board to create 225 jobs in New Jersey.
On Tuesday, Pfizer reported Zoetis's fourth-quarter 2012 revenue rose 6 percent, to $1.17 billion, from $1.06 billion in fourth-quarter 2011. The animal health company reported $4.2 billion of fiscal 2011 revenue, and it currently employs approximately 9,500 workers worldwide.