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Pets at Home joins IPO rush Pets at Home joins IPO rush
(about 4 hours later)
Pets at Home has joined the rush of groups seeking to float, announcing plans to list shares on the London Stock Exchange later this year. Staff at the retail chain Pets at Home are set to share a windfall of £120 million as the company announced plans for a £1.5 billion flotation
The British seller of pet food, mainly owned by U.S. private equity group KKR, hopes to raise £275 million from a share offer to reduce its indebtedness. The private equity-owned business, founded 23 years ago in Chester, today became the latest in a long line of retailers announcing plans to join the stock market, following Poundland yesterday, whitegoods seller AO.com last week, and newsagent McColls last month.
It said KKR, certain other shareholders and members of the management team may also realise a part of their investment in Pets at Home through the repayment of shareholder loans and a sale of new shares. If the £1.5 billion valuation of Pets at Home is realised, it will be a significant success for current owner KKR, which bought the UK’s biggest pet shop business three years ago for £995 million.
Pets at Home is one of many retailers looking to float in the UK this year. Chief executive Nick Wood told the Evening Standard that today was the perfect time to reveal long-mooted plans for the listing, with which it will raise £275 million, despite rival retailers fighting for a share of investors’ cash.
Russian hypermarket chain Lenta, newsagent and convenience store McColl's, online domestic appliances retailer AO and discount retailer Poundland have announced plans to float. He said: “We are unique in terms of our proposition and if any investor wants exposure in the UK pet market. In the private equity world I’m always asked ‘when are you going to see some returns?’ so, from now, having considered our options for some time, it is the logical step for our shareholders.”
Fat Face, House of Fraser, Boohoo.com and B&M are also expected to come to market later this year. He said the funds raised would be used to push forward expansion plans that will see the current portfolio of 369 stores grow to 500, alongside 700 veterinary surgeries and 300 pet grooming salons.
Pets at Home said there would be a minimum free float of at least 25 per cent of the group's issued share capital. Mr Wood, the owner of two Bichon Frise dogs, said employees would be given the chance to buy shares at the listing price. About 500 Pets at Home staff already own 10% of the company.
Founded in 1991 the firm trades from 369 stores across the UK and 246 small animal veterinary surgeries, using the Companion Care and Vets4Pets brand names. The group also runs 116 in-store grooming salons. Management is also hoping the British public’s love of pets will translate into a successful retail portion of the flotation.
It wants over 500 UK stores, more than 700 veterinary practices and in excess of 300 groom rooms in the medium term. Other retailers eyeing up a stock market listing include online fashion business boohoo.com, sofa retailer DFS and department store House of Fraser, which would be making a return to the exchange after it was taken private in 2006.
In the 40 weeks to January 2 revenue at the store  grew 11.7 per cent year-on-year, like for like revenue grew 2.4 per cent and underlying earnings were up 11.1 per cent.
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