Pet care retailer Petco Animal Supplies is going public again, announcing Thursday it has confidentially filed for an initial public offering. Although its private equity owners CVC Capital Partners and Canada Pension Plan Investment Board mulled a set of strategic options, including selling the company, they are moving forward with the IPO.
Petco released a statement saying it had yet to decide how many shares it would issue or at what price. The process would begin after the Securities & Exchange Commission reviews its filing.
A dog that won't hunt?
A confidential IPO initially allowed companies with less than $1 billion in revenue to forego public scrutiny until about 15 days before the offer date, but that was changed in 2017 to allow companies of any size use the process.
Petco, which operates around 1,500 stores, was taken private in 2016 for about $4.6 billion. While the industry remains robust with the American Pet Products Association believing sales will grow 3.4% this year to $99 billion, competition has grown more intense.
Beyond mass merchandisers like Walmart and online giant Amazon, online pet care retailer Chewy (NYSE:CHWY), which is owned by Petco rival PetSmart, benefited from the lockdowns and stay-at-home orders issued in the wake of the pandemic, though it continues to report losses.
Bloomberg reports a Petco IPO would seek to value the company at around $6 billion. Online retail, though, is expected to account for 35% of the pet care industry by 2024, which could pressure the brick-and-mortar retailer.