It’s official. Petco is going public again.
Petco said it plans to trade on the Nasdaq under the ticker WOOF. Goldman Sachs Group and BofA Securities are lead underwriters of the deal.
The IPO comes four years after private equity firms CVC Capital Partners and Canadian Pension Plan Investment Board acquired Petco for $4.6bn in 2016. Earlier this year, the PE firms were reviewing strategic options for Petco, including a sale or IPO. In November, Petco said it had confidentially filed with the Securities and Exchange Commission to go public.
The IPO would be the third time Petco will tap the public equity markets. The company first went public in 1994. It went private in 2000 when TPG and Leonard Green acquired Petco in a $600m deal. Petco went public for a second time in 2002.
Petco didn’t disclose how much CVC and CPPIB own of the company. That will likely come in future filings.
Founded in 1965, Petco no longer calls itself a retailer but said it has transformed into a “provider of pet health and wellness offerings.” It operates about 1,470 pet care centers that sell food, toys and supplies, while offering professional services like animal grooming, vet care and pet training.
In 2018, Petco stopped selling dog and cat food and treats that contain artificial ingredients. It removed shock collars from its shelves this year. Petco also offers pet health insurance and a Vital Care membership, which includes unlimited vet exams and dog nail trims and teeth brushing.
The Covid-19 pandemic hurt Petco, which cut operations in many of its pet care centers. This caused a drop in pet care center revenues, the prospectus said. The virus may “adversely affect such revenues for an uncertain period of time,” Petco said in the filing.
Petco isn’t profitable, although losses have narrowed. The company reported $24.8m in net losses for the 39 weeks ended 31 October compared with roughly $94m in losses for the comparable period in 2019. Net sales grew 9% to $3.58bn for the 39 weeks ended 31 October Petco is also highly leveraged. The company had about $3.3bn in debt outstanding as of 31 October, the prospectus said.
Source: Private Equity News
