Bridgepoint to unleash Pets at Home

Two years after shelving similar plans, the European mid-market firm is pursuing a dual-track sale process for Pets at Home that may value it at as much as £700m.

Bridgepoint is preparing to exit Pets at Home, following a particularly strong year for the UK retailer.

For the fiscal year ended in May, Pets at Home reported a 29 percent rise in profits before tax and a 7.5 percent increase in like-for-like sales. It also opened 19 new stores, bringing its total number to 232.

Yesterday, Pets at Home said it had appointed JPMorgan as joint sponsor and bookrunner for a potential public offering in 2010. Subsidiaries have yet to be announced.

A source close to the situation said Bridgepoint is employing a dual track exit approach, meaning it is simultaneously pursuing a trade sale.  

Pets at Home: Awaiting new owners

“Private equity firms are duty bound to cover all bases,” a European GP recently told PEO, noting that their firm has in the past pulled a portfolio company’s IPO in favour of a private sale.

Merchant bank Rothschild will advise on a potential M&A exit for Pets at Home.

Rothschild was also the M&A advisor hired by Bridgepoint in November 2007, when it was pursuing a similar dual track exit for Pets at Home after having more than doubled the retailer’s profits since its initial acquisition. Those plans were later shelved due to adverse market conditions.

Bridgepoint acquired Pets at Home for £230 million in July 2004 from 3i and Intermediate Capital Group. Four subsequent refinancings have generated £120 million for investors, according to UK newspaper The Telegraph, which estimated an exit could value the pet goods chain at £700 million.