KKR’s Pets At Home lists with £1.2bn market cap

A total of 200 million shares were sold in the IPO at a price of £2.45 apiece, giving the company a market cap of £1.225bn.

Pets At Home netted £280m of the offering's gross proceeds through the sale of 114 million new shares. The company will put £240m of the proceeds towards repayment of outstanding amounts owed under its existing senior facilities agreement.

Pets At Home also issued a further 75 million new shares that were earmarked towards repaying shareholder debt. Of the £184m raised in total for this purpose, KKR will receive a cash amount of £136m from the company towards paying down debt provided by the firm.

KKR did not directly sell any of its existing shares in the company in the offering. However, it has granted the underwriters an overallotment option alongside the selling shareholders, which consists of a further 30 million shares. This would mean an additional £74m could be raised if the overallotment option is exercised in full.

Following the flotation, KKR and the company's selling shareholders together reaped £210m in the IPO. A total of £26m was raised by the selling shareholders through the sale of 10.5 million existing shares.

Following the admission, 40% of Pets At Home's stock will be in free-float prior to possible exercise of the overallotment option. KKR holds a stake of 37.3% in the company, though this could decrease should the overallotment option be exercised.

Conditional dealings for the company's stock commenced on 12 March. Admission to the main market of the LSE took place on Tuesday morning. Pets At Home's shares are trading under the ticker symbol "PETS".

Previous investment
KKR acquired Pets At Home from Bridgepoint in January 2010 for £955m, £371m of which was provided as debt by a syndicate comprising Commerzbank, KKR Capital Markets, Nomura and Crédit Agricole CIB. According to unquote" data, both Ardian and Partners Group provided mezzanine funding for the buyout.

Bridgepoint had acquired Pets At Home from 3i and Intermediate Capital Group (ICG) in July 2004 for £230m, with RBS providing debt for the deal. The firm bought the company via an auction process that saw 37 private equity houses bid for the business.

3i and ICG, alongside mezzanine provider AIB Group, bought the company in December 1999 from US-based Petsmart. 3i had already taken part in a £20m funding round for the business in January 1996, according to unquote" data, providing £5m of the total while RBS provided an equal amount in debt.

Just last April, KKR provided Pets At Home with acquisition finance for the bolt-on of Vets4Pets. The Guernsey-based company employed 900 staff and recorded turnover of £100m at the time of the acquisition, according to unquote" data.

Company
Founded in 1991 and headquartered in Cheshire, Pets At Home operates 371 pet stores across the UK, as well as 250 small animal veterinary surgeries and 121 grooming salons for animals.

Pets At Home's net debt stood at around £275m at admission on the stock market, equivalent to 2.5x forecast underlying EBITDA of £110.2m as of March 2014.

The company employs 6,000 staff and recorded turnover of £598.3m for the year ending March 2013, as well as an EBITDA of £98.5m. Pets At Home claims that, in the 40-week period to January of this year, its revenues have experienced year-on-year growth of 11.7%, while EBITDA has grown by 11.1%.

People
Nick Wood is the CEO of Pets At Home.

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• Topics
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• United Kingdom
• KKR
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