Drug maker Pfizer Inc. (NYSE: PFE) has filed a Form S-1 with the SEC for an initial public offering of the company’s animal health unit into a company to be called Zoetis Inc. Pfizer expects to offer up to 20% of Zoetis and did not specify how many shares will be included in the IPO or the share price. Pfizer expects to raise about $100 million from the offering.

None of the proceeds will go to Pfizer or Zoetis, however. The IPO is in fact a debt exchange:

Instead of selling shares of our Class A common stock directly to the underwriters for cash, Pfizer will first exchange the shares of our Class A common stock to be sold in this offering with affiliates of certain of the underwriters, referred to herein as the debt exchange parties, for outstanding indebtedness of Pfizer held by the debt exchange parties.

Following the IPO, Pfizer:

may make a tax-free distribution to its stockholders of all or a portion of its remaining equity interest in us, which may include a distribution effected as a dividend to all Pfizer stockholders or a distribution in exchange for Pfizer shares or other securities (or another similar transaction).

The IPO is expected to take place in the first quarter of 2013, and Pfizer will transfer its animal health assets to Zoetis sometime before the offering.

Joint book-running managers are J.P. Morgan, Bank of American/Merrill Lynch and Morgan Stanley. The full filing is available here.

Shares of Pfizer are down 0.3% in premarket trading this morning, at $23.88 in a 52-week range of $17.05 to $24.49.

Paul Ausick

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