Pharmaceutical giant Pfizer, Inc.'s (PFE: Quote) animal health unit Zoetis, Inc. on Monday filed a regulatory statement for an initial public offering of its Class A common stock to raise up to $100 million. The drug maker is also spinning off its animal health business into the standalone company Zoetis, with the IPO "expected to represent an ownership stake of up to 20 percent."
The move is part of Pfizer's plan to shed certain assets to focus on its core biopharmaceutical products and to boost shareholder returns as it struggles to cope with the loss of patent exclusivity for its blockbuster cholesterol drug Lipitor in November 2011.
In a form S-1 filed with the U.S. Securities and Exchange Commission, Zoetis has not yet revealed the number of shares it is offering, the anticipated pricing, as well as the exchange and the ticker symbol it intends to list under.
The proceeds from the offering will not be received by either Zoetis or Pfizer, as the company will be exchanging the Class A common stock with Pfizer's debt holders. However, Pfizer will maintain its controlling stake in Zoetis through the ownership of 100 percent of its Class B shares.
Zoetis said it targets the completion of the offering in the first half of 2013. The company said Pfizer will transfer its animal health business to Zoetis prior to the completion of the offering.
J.P. Morgan, BofA Merrill Lynch and Morgan Stanley will act as the joint book-running managers for the proposed IPO.
Zoetis is a global leader in the discovery, development, manufacture and commercialization of animal health medicines and vaccines, with a focus on both livestock and companion animals. It generated annual revenues of $4.2 billion in fiscal 2011, and are the largest animal health medicines and vaccines business that targets the about $100 billion global animal health industry.
As part of its asset divestitures, Pfizer has already agreed in April to sell off its nutrition businesses to Nestlé SA (NSTR.L, NSRGY.PK) for $11.85 billion, and now the spin-off and IPO for its animal health business.
Pfizer has been in the process of exploring strategic alternatives for its Nutrition business, along with its Animal Health business, since early July 2011 and was considering all options including, among others, a full or partial spin-off the businesses, sale or other transactions.
Pfizer also completed the $2.375 billion cash sale of its capsule-making business Capsugel to private equity giant Kohlberg Kravis Robert & Co. (KKR) in August 2011.
PFE closed Friday's regular trading session at $23.94, up $0.08 on a volume of 19.81 million shares.
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by RTT Staff Writer
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