Pets at Home to raise £275m in Stock Market bow
PETS At Home has confirmed plans to float on the London Stock Exchange raising £275m to reduce its debt.
The Handforth-based company, currently owned by US private equity firm KKR, is expected to be valued at more than £1bn when shares begin trading next month.
The company is the clear market leader in the UK with nearly 370 stores and 246 small animal vets’ practices under a joint venture model.
Alongside the £275m it will raise from the IPO the company has arranged a new £325m senior facilities agreement to clear its debt pile, which was amassed when KKR acquired the business in January 2010 for £955m.
Tony DeNunzio, Non-Executive Chairman of Pets at Home said: “Pets at Home is the clear leader in an attractive market and is led by an experienced and passionate management team with a proven track record of delivering strong revenue and EBITDA growth.
“The significant investment that has been made over the past few years provides Pets at Home with very strong foundations and positions the company well for the next stage of its development in the public market.”
The company announced the appointment of four new non-executive directors in advance of the listing, including Halfords chairman Dennis Millard as non-executive deputy chairman.
Chief executive Nick Wood added: “Pets at Home comes to the market with a clear leadership position in the UK pet care market and with a mission to be the best pet shop in the world.
“We have delivered consistently strong financial growth and since 2009 we have gained share across all segments of the market. Our performance has been further characterised by an unbroken track record of positive LFL performance over the last decade. Even after the investment made in the business, our operational cash flow has remained consistently strong.
“This is a very exciting time for Pets at Home as we continue to innovate for our customers in both our products and services, and look to drive our expansion programme in the UK to over 500 stores, more than 700 veterinary practices and in excess of 300 Groom Rooms in the medium term.”
The company, founded in 1991 by Salford-born entrepreneur Anthony Preston, said its strong financial performance had continued in the 40 weeks to January 2 this year with total revenue growth of 11.7% and like-for-like sales growth of 2.4%. Underlying EBITDA in the same period rose 11.1% to £87m.
For the full financial year ending March 27 the group is forecasting underlying EBITDA of not less than £110.2m.
In the last three years the group has continued to invest, with KKR pumping £60m in to the business to support expansion. Major projects include the opening of a a second distribution centre in Northampton in 2011 to service south of England stores.
Pets has launched an Asian sourcing operation, continued its store roll-out plan and developed and launched a VIP Club membership scheme for customers.
Over the three year period to March 28 2013, Pets at Home’s revenue has risen from £518m to £598m.
Pets at Home is the second North West retailer to announce plans to list on the stock market in the last month. White goods retailer AO was the first, while online fashion retailer Boohoo is expected to confirm its plans for an IPO in the next week.
