While few investors had heard of Zoetis before 2012, the Pfizer subsidiary made headlines when it announced an IPO registration back in August. Now the Zoetis IPO is in the news again as the division prepares to spin off from Pfizer and sell about 20 percent of value in 86.1 million shares.
Zoetis is the animal health branch of Pfizer, devising drugs, vaccines, and treatments for a variety of livestock and pet markets. The new public company will be the largest of its kind in the United States, and analysts have noted that the Zoetis IPO will be the largest since Facebook.
Valuation of Zoetis stock puts the share price between $22 and $25 per share. This sets the corporation up for a potential $2.2 billion gain in capital. While it comes nowhere near Facebook’s $16 billion, it is still the largest offering in recent times.
Zoetis sells around 300 products on a global level. Its 2012 sales grew by a slow 1.7 percent to about $3.16 billion, but more studious investors are excited about a separate set of figures – operating income. While overall sales growth was slow, 2012 saw a jump in operating income, which increased by 75 percent to $636 million. This shows that Zoetis has become incredibly efficient in the span of a single year, a promising development for potential buyers who want signs that a business can guarantee profits in the long term.
Zoetis is set to sell common stock at the end of January 2013. If the IPO is successful, it could also fuel strong openings for other companies planning on going public in the near future, including TRI Pointe Homes and KaloBios Pharmaceuticals. Swift Zoetis growth could also show other spin-offs and private companies the value of strong operating income and proven efficiency before going public. While sales growth is still a bellweather for general investor reaction, signs of long-term stability may be moving to the forefront of many minds, especially following the disappointing losses in shares.
On the other hand, if the Zoetis opening isn’t as strong as the hopeful $2.2 billion, it could be a sign that the 2013 investment market is waiting for an IPO in a different place or industry.
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