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Pfizer Spinoff Zoetis Zooms on Its IPO

Animal health company raises $2.2 billion


Zoetis (NYSE:ZTS) — the animal health division of Pfizer (NYSE:PFE) — raised $2.2 billion in its initial public offering today, making it the biggest IPO since Facebook (NASDAQ:FB) in May 2012.

Unlike Facebook, Zoetis doesn’t appear to be tripping out of the gate.

Zoetis’ deal priced at $26 after an initial range of $22-$25, and shares are up another 18% so far in Friday’s trading, giving it a current market value of around $13 billion.

Zoetis is the No. 1 player in the animal health category and boasts more than 300 vaccines and drugs. However, its size might be helping to mute its growth, as revenues increased by only 1.7% (to $3.16 billion) in the first nine months of 2012. Operating income was promising, though, surging 75% to $636 million.

Going forward, Zoetis — which has a strong focus on treatments for livestock — should get traction in emerging markets because of the growth in protein-based diets.

Zoetis also has some competitive advantages, such as its global infrastructure (with a presence in 120 countries) and a 3,400-head sales force. It also has little competition from generic alternatives, does not need federal reimbursement and has a strong R&D arm.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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