December 2025
Case Study

Zoetis
Inc.

Zoetis discovers, develops, manufactures and sells animal health medicines and vaccines, with a focus on both livestock and companion animals.

Transaction Terms
Offering Size
$2B
Security
0.25% Convertible Senior Notes
Maturity
2029 (3.5 Years)
Conversion Premium
22.5%
Capped Call
Up 75%
Use of Proceeds
~$1.8B concurrent share repurchase; capped call (~$187MM)
Execution
144A, one-day marketed
$2B
Convertible note
offering size
$1.8B
Concurrent share
repurchase executed
+2%
Stock price increase
during public marketing
Situation Overview

A convertible-funded
share repurchase

As an investment-grade issuer, Zoetis had traditionally funded itself in the bank loan, investment-grade bond and commercial paper markets. With its stock lower following November 2025 earnings, HudsonWest identified an attractive and accretive opportunity for Zoetis to fund a large-scale share repurchase with very low-coupon capital in the convertible market.

HudsonWest was hired to quarterback the preparation and execution process alongside Zoetis's left lead bank — delivering a company-friendly outcome across every dimension of the transaction.

HudsonWest’s Role

Leading a
landmark transaction

01
Transaction Structuring

HudsonWest structured the transaction for the right settlement features, tenor, coupon, conversion premium, capped call upper strike and bank syndicate — ensuring every parameter was optimized for Zoetis.

02
Accounting & Tax Support

HudsonWest worked with the Company's internal and external teams to prepare the technical accounting memo and support the accounting and tax treatment of the instruments.

03
Competitive Capped Call Auction

HudsonWest drove a competitive capped call auction process, resulting in significant savings for Zoetis — directly increasing the accretion of the overall transaction.

04
Transaction Documentation

HudsonWest assisted company in their review and negotiation of key documentation, leveraging HudsonWest's deep convertible structuring expertise.

05
Marketing and Investor Strategy

HudsonWest supported Zoetis and its banks during the marketing process, helping to achieve the company-friendly end of the marketed coupon range and a hedge-fund heavy order book to ensure the largest possible concurrent share repurchase. The stock rose ~2% during public marketing vs. a 15 bps decline for the S&P 500.

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