Pet store firm Petco files for new IPO

The China Post - - WORLD BUSINESS -

Petco plans to go public again al­most nine years af­ter two pri­vate eq­uity firms bought the pet store op­er­a­tor.

For the pur­pose of cal­cu­lat­ing a fil­ing fee, the San Diego com­pany said Mon­day it ex­pects to raise US$100 mil­lion through an ini­tial public of­fer­ing. That amount can change.

The re­tailer of pets, pet food, sup­plies and ser­vices has around 1,400 stores around the U.S. and 13 in Mexico that are run through a joint ven­ture. Petco says it earned net in­come of US$75 mil­lion in its latest fis­cal year. Its prof­its have fallen over the last two years, but have im­proved over the first half of the cur­rent fis­cal year. The com­pany’s an­nual rev­enue grew to US$4 bil­lion.

The fil­ing comes shortly af­ter Petco com­peti­tor PetS­mart was taken pri­vate. A group of in­vestors led by the buy­out BC Part­ners ac­quired PetS­mart in March for US$8.7 bil­lion. PetS­mart had al­most 1,400 stores at the time.

Petco, now known as Petco Hold­ings Inc., was ac­quired by pri­vate eq­uity firms TPG Global and Leonard Green & Part­ners in Oc­to­ber 2006. They paid US$29 per share, or around US$1.68 bil­lion, at a time when high gas prices were hurt­ing shares of Petco and other pet re­tailer stocks. The com­pany’s stock had lost half its value over the 18 months be­fore the deal was an­nounced.

Those com­pa­nies and other in­vestors will main­tain ma­jor­ity vot­ing power in Petco af­ter its IPO.

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