Updated from 12:51 p.m. EST
Shares of baby formula maker
Mead Johnson Nutrition
were rising after their debut on the
New York Stock Exchange
Mead Johnson -- the first IPO of 2009 -- said Wednesday it had priced its initial public offering of 30 million shares at $24 each, raising $720 million. After opening at $26, Mead shares rose to a high of $27.07 before closing at $26.36.
Mead, in which
chose to sell shares last spring, reported $2.88 billion in revenue in 2008. The Evansville, Ind.-based company, which makes Enfamil infant formula, is the first IPO since November, when
Grand Canyon Education
Bank of America's
securities unit underwrote the offering. Bristol-Myers will retain majority ownership of the company.
While Mead completed its offering, two other expected IPOs, renewable fuel company
Changing World Technologies
and security specialist
, postponed their initial sales, MarketWatch.com reported.
Bristol-Myers issued a statement Wednesday concerning the Mead IPO:
"With its own publicly traded equity, Mead Johnson will be better able to accelerate its growth. The offering allows Bristol-Myers Squibb to further strengthen our capital structure as well as increase our focus on the BioPharma business portfolio, fulfilling yet another part of our health care business strategy we announced just over one year ago. Our management agrees that this IPO is great news for employees of both companies."
Peter Leemputte, Mead's chief financial officer, said in an interview that separating from Bristol-Myers will also give the company better access to capital.
He said the company is well-positioned to maintain a leadership role in its field, in part because births in middle-class families are growing in emerging markets and owing to its focus on pediatric and infant nutrition. Child-health issues are becoming more important in emerging markets, he said, and even in lean economic times parents aren't likely to cut back on costs to care for their children.
Health care is considered one of the safer sectors for investors during economic downturns, though no area is fully immune. While Leemputte declined to provide specifics about how the recession was affecting Mead these days, he said fourth-quarter revenue grew despite the downturn, excluding the effects of currency-exchange rates.
Leemputte didn't want to go into specifics about other areas Mead might be exploring, but he said that broadly the company is looking at allergies, mental development and bone development.