Pet industry resilience: PE-backed Petco returns to public markets

The Wire

Jan. 15, 2021

Petco, backed by CVC, CPPIB, goes public for a third time, Thoma Bravo prices $900m SPAC

Note to readers: Resending this morning's PE Hub's newsletter. An earlier version resent yesterday's news.

Morning, everybody!

Housekeeping: Your daily rundown on PE dealmaking will not run as scheduled on Monday for the MLK Day holiday. We will be back Tuesday morning!

Now, for some news.

Puppy love: While SPACs continue to be all the rage, it’s important to acknowledge that regular-way IPOs aren’t going away. Leave it to the pet industry to make some noise.

Petco Health and Wellness, backed by CVC Capital Partners and Canada Pension Plan Investment Board, returned to the public markets on Thursday for a third time – following which shares flied high. Petco shares finished the day up 64 percent at $29.40 to push its market cap to $6.4 billion, Bloomberg said.

CVC and CPPIB, which will remain pet products retailer’s controlling shareholders, acquired Petco in 2016 from TPG and Leonard Green & Partners at an about $4.6 billion value. The latter PE duo took the company private in 2006 for a second time at a $1.8 billion valuation. First time around, TPG and LGP took Petco private in 2000 in a $600 million deal, before taking it public for a first time in 2002.

The pet industry has produced more than one strong outcome through the pandemic – further validating a market that investors have long touted for its durability and sustained growth regardless of market conditions.

Read the full wire commentary on PE Hub.

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Note to Readers: It's that time of year ... for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.

Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

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Also of note (may require subscriptions)

Traditional: British Columbia Investment Management Corporation is considering a sale of a large portfolio of PE fund stakes of up to $1 billion. The process comes as such traditional LP portfolio sales have largely stopped as buyers look for ways to appropriately price the diverse underlying assets held within the PE funds via GP-led processes, Buyouts writes. Check it out here.