PetSmart is moving forward with a plan to take public its fast-growing online pet business, Chewy, just two short years after acquiring the company.
Chewy’s sales have surged in recent years, topping $3.5 billion in 2018, as more people buy pet food and supplies online.
The company is looking to raise $100 million, according to the filing, although this figure is commonly used as a placeholder and is likely to change.
The planned IPO comes just two years after PetSmart spent over $3 billion to acquire the e-commerce company. The move was billed as a way for PetSmart to establish a robust online presence that supplemented its sprawling brick-and-mortar footprint of 1,600 stores.
Last year, however, PetSmart spun off a portion of its equity in Chewy and set the stage for a potential public offering or sale. The move prompted legal action from several lenders who said they didn’t approve of such a transfer. The litigation came to an end in April, the company said in the filing. (PetSmart was acquired in an $8.7 billion leveraged buyout, led by investment firm BC Partners, in 2015.)
PetSmart will continue to be the company’s majority shareholder after the IPO, according to the filing. The company said it would use the proceeds for working capital and other general corporate purposes.
Chewy was launched in 2011 by Ryan Cohen and Michael Day, two college dropouts who met in a Java chat room. The online-only pet business quickly and quietly gained traction and today is responsible for selling 45% of the dog and cat food that is purchased online, which puts it on par with Amazon, according to market research firm 1010data.
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