Font size
Petco has more than a thousand pet care centers that sell supplies as well as offer services.
Bruce Bennett / Getty Images
Poshmark
and
Petco Health & Wellness Co.,
the latest participants in the IPO boom entered the public stock markets on Thursday. Shares of Poshmark were up nearly 142%, while Petco gained about 83%.
Shares of Poshmark (ticker: POSH) opened at $ 97.50 and hit as high as $ 104.98. Shares closed at $ 101.50 on Thursday, up 141.7%
The strong performance came after Poshmark raised $ 277.2 million after selling 6.6 million shares for $ 42, above the $ 35 to $ 39 price range.
Morgan Stanley, Goldman Sachs and Barclays are the insurers of the deal.
Poshmark operates a marketplace where consumers can buy and sell new and used items such as shoes, clothing and jewelry. The company had 4.5 million active sellers on September 30 and offered more than 201 million used and new items to 6.2 million active buyers. Poshmark charges a 20% fee for sales of $ 15 or more.
Petco also made his debut on Thursday, trading on the Nasdaq under the ticker WOOF. Shares opened at $ 26 and skyrocketed to $ 31.08. The stock ended at $ 29.40, up 63.33%.
“The IPO has exceeded our expectations,” said Petco CEO Ron Coughlin. “Really smart investors believed in our strategy and people. It’s an exciting day for Petco. “
The San Diego company raised $ 864 million, more than expected. Poshmark’s IPO raised $ 272.2 million after pricing well above the expected range.
Last Wednesday, Petco, a pet health and wellness company, sold 48 million shares for $ 18 each, more than $ 14 to $ 17 it told investors to expect. Goldman Sachs and BofA Securities are the insurers of the deal.
Petco, which no longer calls itself a retailer, operates approximately 1,470 pet care centers selling food, toys and supplies, while offering professional services such as pet care, veterinary care and pet training.
All proceeds from the IPO will help reduce Petco’s $ 3.24 billion debt burden, Coughlin said. The company’s debt payments will be cut in half, he said. This will allow Petco to continue to grow his business, he said.
“There are plenty of growth opportunities without having to make acquisitions,” said Coughlin Barron’s. Petco’s veterinary business has grown to 105 clinics this year from 15 a year ago, while its digital business is up 30% in the third quarter, he said. Same-day delivery comprises 30% of ecommerce orders, Coughlin said.
CVC Capital Partners and the Canadian Pension Plan Investment Board will own nearly 67% of the company after the IPO. The stock has previously been publicly traded, but the company was taken private both times.
The pet grooming industry has long been considered nearly recession proof as pets are increasingly viewed as family members. The industry represented more than 72 million pet households in 2020 and a total addressable market of $ 97 billion. The Covid-19 pandemic, which sparked an increase in pet adoptions, is expected to help the industry grow 7% per year through 2024, Petco’s prospectus said.
Petco is one of the few end-to-end service providers for pet owners. The stores provide food, grooming, and training, as well as veterinary services. “Owning a pet can be overwhelming,” Coughlin said. “We have to go to one place for grooming, another place for training … only Petco can bring them together in a great way.”
Write to Luisa Beltran at [email protected]