Pets at Home eyes £600m flotation

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Pets at Home, the private-equity-owned pet food and accessories chain, is mulling over a stock-market listing which could value the business at £600m.

Founded in 1991 with a single shop in Chester, the company has grown rapidly and currently operates from 207 stores at out-of-town shopping centres across the country.

It has capitalised on the nation's love of pets and an increasing desire on the part of the consumer to spend more money on their animals. The UK pet market is the biggest in Europe and is worth £2.5bn a year.

Pets at Home has appointed Rothschild to examine a possible sale of the business and Citi and JPMorgan Cazenove as joint bookrunners should an initial public offering go ahead.

The company strengthened its position as market leader in 2000 when it bought up PetSmart from its US parent company, taking the number of stores from 60 to 145.

Private-equity house Bridgepoint snapped up the business in 2004 for £230m. The founder, Anthony Preston, who is no longer involved in the day-to-day running of the firm, and the management team kept an undisclosed minority stake.

Chief executive Matt Davies said the company had the potential to grow to 400 stores with further investment. "Pets at Home is unique in the UK due to the range of productsavailable," he said. "But there are still many areas where people don't have easy access to one of our stores."

Rabbits, guinea pigs and rats are all sold at Pets at Home, and the company is introducing veterinary practices and adoption centres into its stores. It is also currently revamping its website in order to start selling products online.

Mr Davies said: "People are definitely spending a lot more on their pets. They are more aware of the importance of what they feed them and how to treat pets. There is more disposable income around and there is a move towards trading up that you also see with humans."

Last year, the company's turnover was £306.5m, and earnings before interest, tax, depreciation and amortisation hit £46.7m. Profits have doubled since Bridgepoint bought the company.

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