Petco, backed by CVC, CPPIB goes public for a third time, Thoma Bravo prices $900m SPAC

CVC and CPPIB-backed Petco goes public for a third time and Thoma Bravo prices SPAC at $900 million.

Morning, everybody!

Housekeeping: Your daily rundown on PE dealmaking will not run as scheduled on Monday for the MLK Day holiday. We will be back Tuesday morning!

Now, for some news.

Puppy love: While SPACs continue to be all the rage, it’s important to acknowledge that regular-way IPOs aren’t going away. Leave it to the pet industry to make some noise.

Petco Health and Wellness, backed by CVC Capital Partners and Canada Pension Plan Investment Board, returned to the public markets on Thursday – following which shares flied high. Petco sharea finished the day up 64 percent at $29.40 to push its market cap to $6.4 billion, Bloomberg said.

Petco has undeniably grown in value over the years.  CVC and CPPIB, which will remain pet products retailer’s controlling shareholders, acquired Petco in 2016 from TPG and Leonard Green & Partners at an about $4.6 billion value. The latter PE duo took the company private in 2006 for a second time at a $1.8 billion valuation. First time around, TPG and LGP took Petco private in 2000 in a $600 million deal, before taking it public for a first time in 2002.

The pet industry has produced more than one strong outcome through the pandemic – further validating a market that investors have long touted for its durability and sustained growth regardless of market conditions.

For example, Morgan Stanley Capital Partners in 2020 sold off a majority stake in Pathway Vet Alliance in the midst of a horrible downdraft in the markets, scoring one of the last syndicated LBO loans to get done before debt markets largely shut down. The vet care giant traded hands at a $2.65 billion value, or close to an 18x EBITDA multiple, bringing on TSG Partners as a majority owner, PE Hub wrote in March.

MSCP’s Aaron Sack told me in late November that Pathway’s outcome only heightened investor enthusiasm for other pet-related opportunities, ultimately accelerating MSCP’s plans to monetize another existing portfolio company, Manna Pro, a maker and distributor of specialty pet nutrition and care product.

What else is coming to market in the pet products or pet healthcare land? Hit me up!

On the horizon: There’s a new SPAC vehicle of scale to watch, everybody.
Prolific tech investor Thoma Bravo priced the initial public offering of Thoma Bravo Advantage at $900 million. Not surprisingly, the SPAC plans to lock down a business combination in the software industry. Its shares will be listed on the NYSE beginning Jan. 15 under the ticker symbol “TBA”. Read PE Hub’s brief on the news.

In other SPAC activity to keep tabs on, United Wholesale Mortgage is expected to complete its much-anticipated combination with Gores Holding IV SPAC on Friday, January 22 to become a publicly traded company on the NYSE. This will represent the largest SPAC merger in history.

Originally announced in September, the deal values UWM at about $16.1 billion, or 9.5x the company’s estimated 2021 adjusted net income of about $1.7 billion. Read more on PE Hub.

That’s it for today’s rundown. Have a great weekend, and in the meantime, write to me with any tips, comments or just to say hello!

Note to Readers: It’s that time of year … for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.

Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.

If you have additional questions, email Private Equity Editor Chris Witkowsky at cwitkowsky@buyoutsinsider.com.