Where the pets go: Petco files for an IPO that could raise up to $500 million

Petco Holdings, which operates more than 1,400 pet superstores in the US, Mexico and Puerto Rico, filed on Monday with the SEC for an IPO that we estimate could raise up to $500 million. 

After an LBO by TPG Capital and Leonard Green Partners for $1.8 billion in 2006, Petco is planning an offering that could value the company at $4-$5 billion. In March 2015, close competitor PetSmart was acquired for $8.7 billion (8.5x forward EBITDA and 19x forward P/E) by a PE consortium led by BC Partners.

The San Diego, CA-based company was founded in 1965 and booked $4.2 billion in sales for the 12 months ended July 31, 2015. Goldman Sachs, BofA Merrill Lynch and J.P. Morgan are the joint bookrunners on the deal. No pricing terms were disclosed.