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Petco operates more than a thousand pet care centers that sell supplies, but also offer services.
Bruce Bennett / Getty Images
Poshmark
and
Petco Health & Wellness Co.,
the last participants in the IPO boom entered the public capital markets on Thursday. Poshmark shares rose nearly 142%, while Petco gained about 83%.
Poshmark shares (ticker: POSH) opened at $ 97.50 and reached a high of $ 104.98. Shares closed around 101.50 USD on Thursday, up 141.7%
The strong performance came after Poshmark collected $ 277.2 million, after selling 6.6 million shares for $ 42, over its price range of $ 35 to $ 39.
Morgan Stanley, Goldman Sachs and Barclays are the underwriters of the transaction.
Poshmark operates a marketplace that allows consumers to buy and sell new and used items such as shoes, clothing and jewelry. The company had 4.5 million active sellers as of September 30, offering over 201 million second-hand and new items to 6.2 million active buyers. Poshmark charges a 20% fee for sales of $ 15 or more.
Petco made its debut on Thursday, trading on the Nasdaq under the WOOF marker. The shares opened at $ 26 and rose to a high of $ 31.08. The stock ended at $ 29.40, up 63.33%.
“The IPO has exceeded our expectations,” said Ron Coughlin, CEO of Petco. “Really smart investors believed in our strategy and our people. It’s an exciting day for Petco. ”
The San Diego-based company raised $ 864 million, more than expected. Poshmark’s IPO grossed $ 272.2 million, after setting prices well above the expected range.
Late Wednesday, Petco, a pet health and wellness company, sold 48 million shares for $ 18 each, above the $ 14 to $ 17 range it had told investors to expect. Goldman Sachs and BofA Securities are the underwriters of the transaction.
Petco, no longer called a retailer, operates approximately 1,470 pet care centers that sell food, toys and consumables, while providing professional services such as animal care, veterinary care and pet training.
All IPO revenues will help reduce Petco’s debt by $ 3.24 billion, Coughlin said. The company’s debt payments will be halved, he said. This will allow Petco to further grow its business, he said.
“There are a lot of growth opportunities without having to make purchases,” Coughlin said. Barron’s. Petco’s veterinary business has grown to 105 clinics this year, up from 15 a year ago, while its digital business grew 30 percent in the third quarter, he said. Same-day delivery includes 30 percent of e-commerce orders, Coughlin said.
CVC Capital Partners and the Canadian Pension Investment Board will own nearly 67% of the company after the IPO. The shares have been publicly traded before, but the company has been privately owned both times.
The pet care sector has long been considered evidence of near recession, as pets are increasingly considered family members. The 2020 industry accounted for over 72 million pet households and a total addressable market of $ 97 billion. The Covid-19 pandemic, which has led to an increase in pet adoptions, is expected to help the sector grow by 7% annually by 2024, according to the Petco prospectus.
Petco is one of the few end-to-end service providers for pet owners. Its stores offer food, care and training, as well as veterinary services. “Having a pet can be overwhelming,” Coughlin said. “We have to go to one place for care, to another place for training … only Petco can bring them in an excellent way.”
Write to Luisa Beltran at [email protected]