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Pfizer’s $4B Zoetis IPO May Come in Early ’13

PFE trying to focus on its core business


Pfizer (NYSE:PFE) apparently is planning to launch the IPO of its animal-health unit, Zoetis, in early 2013.

According to the Wall Street Journal, the deal could raise as much as $4 billion (with Zoetis being valued at nearly $20 billion), which would likely make it one of the year’s biggest. Lead underwriters include JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS).

Founded more than 60 years ago, Zoetis is the largest player in animal health medicines and vaccines. The company sells more than 300 products in more than 120 countries and boasts a sales force of about 3,4000 employees.

During the first half of 2012, Zoetis’ revenues climbed by 4% to $2.14 billion and earnings doubled to $284 million.

While Zoetis certainly is a solid business, it is not synergistic with Pfizer’s core business. Thus this should be a classic case of enhancing shareholder value via a spinoff. Also, the proceeds from the offering will allow PFE to continue its aggressive stock buybacks.

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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