Shares of Petco Animal Supplies ( PETC) saw respectable if somewhat muted gains Friday, after the company's return to the public marketplace.

Petco rose at high as $20.49 after the company sold 14.5 million common shares in an initial public offering at $19 each. The company plans to use proceeds of $275.5 million to buy back preferred stock from two private investment firms. The stock ended regular trading at $20, up $1, or 5.3%.

"We are delighted to return to the Nasdaq National Market today as we further develop the Petco brand," President and CEO Brian K. Devine said in a statement.

Petco began trading under the same symbol that it used when it first went public in 1994. The company was taken private in October 2000 by buyout firms Texas Pacific Group and BD Recapitalization Holdings, an entity controlled by Leonard Green & Partners.

The company, which sells grooming products, toys and pet food, has 561 stores in 41 states and the District of Columbia, according to its IPO prospectus.

"This is a slow and steady issue," said David Menlow, president of IPOFinancial.com. "It doesn't have a lot of razzle dazzle, but we like the company."

For the past 35 quarters, the company has grown same-store sales by at least 5%, Menlow said, making it a very predictable business.

The IPO market has picked up in recent weeks, with a number of companies posting healthy gains in their first day of trading.

PayPal ( PYPL) surged 55% on its opening day, the biggest gain for a public offering this year. Still, the stock is now trading around its $13 offering price. Shares of video game retailer GameStop ( GME) jumped 11% on its first day. ManTech ( MANT) added 14%, Sunoco Logistics ( SXL) rose 9%, and Carolina Group ( CG) the tracking stock for Loews Corp.'s ( LTR) Lorillard Tobacco business, rose 4% above its offering price on the first day of trading.

Still, the environment for new issues continues to be challenging as evidenced by BidBay.com's withdrawal of a $60 million IPO and education specialist Linkage Solutions' withdrawal of a $40 million IPO.

"We're in a marketplace where demand is there for the right deals because there's an IPO drought," Menlow said. "But investors are being very cautious due to the apprehension in the broader market."

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