Pfizer Unit Seeks $2.2 Billion in IPO

NEW YORK�A brisk week in the IPO market will be headlined by animal-medicine maker Zoetis Inc., which is aiming to raise as much as $2.2 billion in what would be the largest deal from a U.S. company since Facebook Inc.'s initial public offering.

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Pfizer's Zoetis, which makes animal medicine, reported revenue of $3.2 billion for first nine months of last year.

Also on tap is an IPO from Tri Pointe Homes Inc., which is looking to become the first home builder to go public since 2004.

Zoetis, being carved out of drug maker Pfizer Inc., makes vaccines and drugs for pets, as well as cattle, swine and other farm animals. It is the biggest animal-medicine and vaccine company in the world by revenue.

Pfizer last year began planning to divest the business, which it says isn't core to its human-health businesses, to raise cash and return it to shareholders via a stock buyback.

Zoetis reported revenue of $3.2 billion for first nine months of last year, or about 7% of Pfizer's $43.9 billion in overall revenue during that period. Zoetis's revenue rose 1.7% over that time, while net income rose 87% to $446 million.

The IPO would be the largest from a U.S. company since Facebook's $16 billion deal in May. It would also be the largest carveout to list on a U.S. exchange since U.K. hedge-fund manager Man Group PLC broke away from MF Global Ltd., its brokerage arm, in a $2.9 billion deal in 2007, according to Dealogic.

Zoetis will operate with a dual-class share structure. If they want stakes in the business, current Pfizer shareholders must go into the open market to buy the 81.6 million Zoetis Class A shares that will be sold in the IPO. Pfizer will hold all 414 million Class B shares, giving it roughly 83% control of Zoetis.

Large companies tend to carve out distinctive business segments to facilitate growth and unlock potential gains for shareholders.

"Corporate boards are under pressure by shareholders to return value, whether it's increasing dividends or buying back stock. But that can also involve corporate restructuring," said Brad Miller, global co-head of the equity syndicate desk at Deutsche Bank AG.

Bristol-Myers Squibb Co. sold its baby-formula maker, Mead Johnson Nutrition Co., in 2009. Mead Johnson has gained nearly 160%, and Bristol-Myers is up nearly 60% since the carveout. In October, organic-milk producer WhiteWave Foods Co. splintered off from Dean Foods Co.; shares of both are slightly lower since the offering.

Zoetis's IPO is expected to hit the New York Stock Exchange on Friday under the ticker symbol ZTS.

The market will also see an entrant aiming to capitalize on the U.S.'s nascent housing recovery. Tri Pointe Homes is looking to raise as much as $187.2 million and become the first home builder to launch an IPO since 2004, amid the housing-market boom.

Tri Pointe, based in Irvine, Calif., builds single-family homes in communities across California and Colorado. Its sales were $22.3 million in the nine months ended Sept. 30, more than double the $9.2 million in the year-earlier period. The company's losses widened to $3.9 million in the first nine months of 2012 from $3.1 million a year earlier. It has sold more than 350 homes since its founding in 2009.

Home prices, sales and permits for new construction have been on the rise, boosting stock prices for home builders and companies tied to the housing market. Issuers and their bankers are looking to strike while the market is primed to receive new issues from the sector, bankers say. Early next month, plywood maker Boise Cascade LLC will look to raise as much as $212 million in an IPO.

Two biopharmaceutical companies also are poised to list on the Nasdaq Stock Market .

KaloBios Pharmaceuticals Inc., based in San Francisco, is seeking to raise as much as $54 million. The company develops treatments for respiratory diseases and certain cancers. Its stock is expected to trade under the symbol KBIO.

Stemline Therapeutics Inc. will look to raise as much as $27 million on the Nasdaq. Its focus is the development of cancer treatment targeting cancer stem cells, which self-renew and generate the bulk of tumors. Its deal is slated for Tuesday and will trade under the symbol STML.

Write to Chris Dieterich at chris.dieterich@dowjones.com