NEW YORK (The Deal) -- Petco Holdings, the San Diego-based retailer of pet products, filed for an initial public offering Monday.
The company, which indicated it would seek to raise $100 million, likely a placeholder amount, is coming to the end of a standard hold period by its private equity backers, TPG Capital and Leonard Green & Partners, which have held it since 2006 when they bought it for nearly $1.7 billion.
Terms of the offering weren't provided, though Petco said proceeds would go to selling shareholders.
Besides TPG, which has a 46.8% stake in the company, and Leonard Green with its 37.5% stake, selling shareholders may include Freeman Spogli & Co., which has a 6.7% stake, and the Abu Dhabi Investment Authority, which has an 11.9% stake.
Lead underwriters include Goldman Sachs(GS) - Get Report, Bank of America Merrill Lynch and J.P. Morgan Securities. Additional underwriters include Credit Suisse (USA), Wells Fargo Securities, Deutsche Bank Securities and Morgan Stanley(MS) - Get Report.
The IPO is the latest activity related to the pet category, which has been active in recent years due to the increasing "humanization of pets. At the beginning of the year, rival PetSmart was taken private by a consortium led by BC Partners in a deal valued at $8.7 billion.
Petco has played its own role in acquisitions, bolstering its business in late 2014 by buying Foster and Smith, which does business as Drs. Foster & Smith, a hybrid catalogue and e-commerce business with its own line of branded products that had around $250 million in revenue. The retailer said in its IPO filing that it used close to $160 million of its cash to finance the transaction.
The company has also financed dividend payments for its sponsors.
Petco paid out nearly $590 million in cash in fiscal 2012 to its shareholders, backed by $550 million in senior pay-in-kind, or PIK, toggle notes, according to regulatory filings. The retailer stipulated, though, that the cash payment was comprised of approximately $400 million return of capital and close to $190 million in a dividend payment.
As of Aug. 1, Petco has cash and cash equivalents of almost $60 million and total debt of close to $2.33 billion.
Although the pet retailer's same-store sales growth has slowed a bit, it continues to generate positive numbers.
Petco had positive comparable store sales in recent years, including a 2.9% growth clocked for the 26 weeks ended Aug. 1. For fiscal 2014, ended Jan. 31, comparable sales grew 1.8%, while for the same period a year prior comparable sales grew 4.9%, and in fiscal 2012, they grew 7.6%.
Revenue for the pet retailer for the fiscal year ended Jan. 31 was close to $4 billion, while for the same period a year prior it was nearly $3.8 billion, and for the fiscal year ended Feb. 2, 2013, revenue was about $3.5 billion.
Revenue continued to grow in the first half of fiscal 2015. As of Aug. 1, revenue grew to almost $2.17 billion, compared to approximately $1.94 billion for the same period a year prior. Meanwhile, Ebitda for the retailer was about $410 million for the fiscal year ended Jan. 31, while for the same period a year prior it was about the same. For the fiscal year ended Feb. 2, 2013, Ebitda was approximately $390 million.
Some of the gains in revenue and profit in recent quarters was a result of the acquisition of Foster and Smith.
As of Aug. 1, Petco operated 1,409 stores in the U.S. and Puerto Rico, and an additional 13 stores in Mexico via a joint venture. The company also sells products via the internet, via Web sites such as Petco.com, DrsFosterSmith.com, Liveaquaria.com and Unleashed.com.
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