Pfizer Spins Off Animal Health Unit in $2.2 Billion I.P.O.

Making medicines for livestock and pets may not seem to be as sexy a business as social networking. But Pfizer’s animal health unit is poised to enjoy the biggest stock market debut since Facebook’s offering last spring.

The Pfizer division, known as Zoetis, raised $2.2 billion in its initial public offering on Thursday, exceeding expectations by pricing its stock at $26 a share, above the expected range of $22 to $25 a share. The sale values the company at about $13 billion.

The spinoff is a welcome sign for Wall Street that the I.P.O. market in recent months is finally returning, eight months after Facebook’s stumbles helped prompt a chill among investors.

The lackluster performances of socks of Facebook, Groupon and other once-hot social media darlings had made many companies cautious about pursuing stock offerings. But in recent months, companies as varied as Norwegian Cruise Lines and Realogy, the parent of the real estate brokerage firm Century 21, have beat expectations as demand proved stronger than expected.

Notably, most of the companies that have gone public since the fall haven’t come from the technology industry. So far this year, offerings have raised $2.5 billion, more than quadruple what was collected in the same time last year, according to the data firm Research Capital. Many of these offerings have priced above their predicted range, or at least met the high end of expectations.

Notably, however, most of the companies that have gone public since the fall haven’t come from the technology industry.

In! many ways, Zoetis (pronounced “zoe-EH-tis”) is as far from a fresh-faced Internet darling as possible. Formed six decades ago, the business focuses on making and selling medicines for livestock and pets.

Zoetis is solidly profitable, having earned $446 million on top of $3.2 billion in revenue for the first nine months of last year. And the company has increased its earnings for each of the last three years.

Zoetis’s central pitch to potential investors is relatively simple: It is the biggest player in an industry that is rapidly growing, seizing on rising pet adoption and consumption of meat around the world.

The company’s products aren’t subject to intense competition from generic rivals, an issue that Pfizer often confronts. And because customers pay for the medicines out of pocket, Zoetis doesn’t need to worry about dealing with insurers.

All that has helped generate demand unseen since at least Facebook’s $16 billion offering. Zoetis’s stock sale was more than 1 times oversubscribed, according to a person with direct knowledge of the matter. Even major institutional investors received only a fraction of the shares they requested.

Meetings during the company’s nine-day roadshow were often standing room only, as potential buyers and analysts crowded into conference rooms to listen to Zoetis executives and their advisers pitching their company. More than 250 people crammed into a luncheon presentation at a hotel in Midtown Manhattan last week, with some institutions sending tens of portfolio managers.

“This deal has been talked about for months,” said Scott Sweet, the senior managing director of IPOboutique.com. “It’s almost a circuslike atmosphere.”

Anticipation began building last summer, when Pfizer announced plans to spin off its animal health division as part of an effort to slim down. Under its chief executive, Ian Read, the drug giant has refocused on its core business of developing new medicines.

That has meant selli! ng or spi! nning off divisions that the company deems nonessential, an effort that included selling an infant nutrition business to Nestlé for $11.9 billion last April.

Pfizer executives explored a sale of Zoetis â€" whose name springs from the word “zoetic,” meaning “pertaining to life” â€" last year. But it decided that the fast-growing division was better off as a publicly traded company.

In a sign of its belief in Zoetis’s prospects, Pfizer plans to hold on to 413.9 million Class B shares, which give it 10 times the voting power of public shareholders.

The company is expected to begin trading Friday on the New York Stock Exchange, under the ticker symbol “ZTS.”

if Zoetis succeeds as a public company, analysts expect other drug makers, including Merck and Sanofi-Aventis, to consider spinning off their own animal health divisions.

Zoetis’ sale was led by JPMorgan Chase, Bank of America Merrill Lynch and Morgan Stanley.