DreamWorks Animation SKG Inc., the creator of the “Shrek” and “Shark Tale” animated films, has raised $812 million in an initial public offering to pay debt and to fund more moviemaking.

DreamWorks Animation, based in Glendale, Calif., and its shareholders sold 29 million Class A shares at $28 each. That compares with a price range of $23 to $25 a share indicated in a Securities and Exchange Commission filing earlier today.

“This was a perfect time for Dream-Works to hit the market with the success of ‘Shrek’ and ‘Shark Tale,'” said Robert Routh, a senior analyst at Jefferies & Co. in New York in an interview before the pricing of the IPO. “This is a hit-driven business. DreamWorks has the brand and the management team that people know.”

By selling now, DreamWorks Animation Chief Executive Jeffrey Katzenberg capitalizes on a year of box-office successes with “Shrek 2,” which has sold $436.5 million in tickets in America and Canada, and “Shark Tale,” which so far has brought in $138 million.

Profit at the new company will vary with the popularity of its films, and the animation unit has made money in two of the last five years, the company said today in a regulatory filing.

Mr. Katzenberg, 53, founded Dream-Works SKG in 1994 together with film director Steven Spielberg, 56, and music executive David Geffen, 61. Four of DreamWorks Animation’s nine films were made using computer-generated animation, the company said in the filing earlier today.

“Shrek 2” is the top box-office per former this year, and “Shark Tale” is ranked no. 8, according to BoxOffice-Mojo.com, which collects revenue figures from movie studios.

DreamWorks Animation’s market value is $2.96 billion based at the IPO price of $28 each. Rival animated film company Pixar Animation Studios has a market value of $4.5 billion and its stock has gained 15% this year compared with the Standard & Poor’s 500 Index which has risen 1.2%.

The company’s shares will trade on the New York Stock Exchange under the symbol “DWA.”

DreamWorks Animation plans to use $175.5 million of the IPO’s proceeds to fund its business and the remaining money to pay back $405 million of debt. The company had net income of $120.7 million on operating revenue of $341.1 million in the six months to June 30, compared with a loss of $114.7 million on operating revenue of $118.5 million.

The company can put out two computer-generated animation movies a year, it said in the filing. Its next computer-animated film will be “Madagascar,” to be released in spring of 2005, DreamWorks Animation said.

The animation company’s next 12 movies after “Shark Tale” will be distributed through DreamWorks Studios.

DreamWorks Animation will pay about 8% of revenue to have its films distributed by the parent company, which in turn has a distribution agreement with Universal Studios, the company said in the filing. The distributors get to recoup their costs, as well as the 8% fee, before DreamWorks Animation collects any money, the company said. That is the customary arrangement between producers and distributors in Hollywood.

As a result, DreamWorks Animation and its shareholders will bear most of the losses stemming from movies that flop. Assuming this arrangement was in place last year, the parent DreamWorks Studios would have earned $22.9 million in distribution fees, or about 8% of revenue from DreamWorks Animation films, in 2003.

The animation business would have recorded losses of $159.9 million, or the amount by which expenses exceeded revenue that DreamWorks Animation received after the distributors took their cut, according to the filing.

“It’s the producer that has the risk,” said Pierce O’Donnell, a Los Angeles attorney who has sued and defended major Hollywood studios, including DreamWorks, United Artists, and Warner Brothers.

Mr. Katzenberg, who left Walt Disney Co. after being passed over to become president, will get the chance to run a public company for the first time. He’ll be competing with Disney, which lost its film distribution agreement with Pixar Animation Studios and stumbled with animated films such as “Treasure Planet.”

Mr Katzenberg ran Walt Disney Studios from 1984 to 1994, where he was responsible for worldwide production and distribution of Disney films including “Who Framed Roger Rabbit” and “The Lion King.” Prior to that job, he was president of Paramount Pictures.

DreamWorks SKG’s live-action films “Collateral” and “Anchorman: The Legend of Ron Burgundy” are among the year’s top 20 films, bringing in $185.4 million at the box office.

Messrs. Geffen and Katzenberg control more than 90% of the company’s voting shares. They each received about $160 million of Class B stock as part of the separation of DreamWorks Animation from DreamWorks SKG.

DreamWorks Animation shareholders such as Microsoft Corp. co-founder and billionaire Paul Allen, investment fund DW Investment II Inc., and Viven di Universal Entertainment sold stock in the IPO, according to the SEC filing.

Mr. Allen has Class A and Class B shares. Class B shares entitle a shareholder to 15 votes a share and Class A stock get one vote a share.

DreamWorks Animation sold stock in the best U.S. IPO market since 2001. Last year was the worst market for initial stock sales in 13 years.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. managed the IPO with 10 other securities firms sharing fees of as much as $46.7 million.