Another pet stock with a customer group of "shoveling shit officials" is going to be listed!

PetSmart, a private pet supermarket chain, is working with US private equity KKR & Co, according to Bloomberg, citing people familiar with the matter. The holding of a special purpose acquisition company (SPAC) is in talks to achieve a US IPO, a potential deal that could be valued at $14 billion, including debt.

Last March, KKR Acquisition Holdings I Corp., a special-purpose acquisition company owned by KKR, raised $1.38 billion through IPO. PetSmart is currently in talks to go public through a merger with KKR Acquisition, according to people familiar with the matter. But the negotiations are still in the early stages of getting up and there is no guarantee that a deal will be reached.

In December 2014, the consortium led by BC Partners offered $83 per share to acquire PetSmart, with a total valuation of $8.7 billion. The deal was settled in March 2015 and PetSmart was delisted from the Nasdaq Stock Exchange.

A brief introduction to the life of the global pet giant Petsmart

As the largest pet retailer in the United States, PetSmart's business consists of two parts, retail and services. The retail sector is the backbone of the company, while the service sector includes beauty care, foster care, dog training, etc.; at the same time, it also holds a stake in Banfield, the largest pet clinic chain in the United States (more than 1000 pet clinics) to increase pet clinic services.

As of 2020, PetSmart has more than 1650 stores in the United States, Canada and Puerto Rico, as well as more than 800 in-store pet clinics and more than 200 pet foster hotels (PetSmart PetsHotel).

PetSmart was founded in 1987, itself is a family business, first started to make products, and then set foot in the channel. By 1990, PetSmart had 29 stores with an average area of 2500 square meters. It was the first warehouse-style hypermarket (Pet food warehouse) model in the United States. It provided almost no in-store services and pet-related services.

In 1993, PetSmart was listed on NASDAQ in the name of "PETM" and began to integrate and acquire small and medium-sized pet supermarket chains.

However, after more than 10 years of development, the "low-price volume sales" model is difficult to sustain, the company's capital market performance and financial performance have declined sharply, and its direct competitors Petco, including its indirect competitors Amazon.Com Inc (Amazon), Walmart Inc (Walmart) and Target Corp (Target) have further expanded and occupied the pet market share.

As a result, PetSmart has thoroughly subverted its development strategy and positioning, and determined the comprehensive experience model of "retail + service". Since then, around this positioning, the company has continued to optimize, enrich and expand the model. In addition to optimizing the revenue structure and increasing the efficiency of stores, it has also avoided price competition with large merchants.

In 2014, PetSmart began to lay out online opportunities and acquired Pet360, a famous online comprehensive online platform for pets in the United States. its main website provides pet owners with pet knowledge and product recommendations, with more than 12 million monthly visitors.

In 2017, PetSmart acquired Chewy, the largest online retail platform for pets in the United States, for $3.35 billion. Chewy was founded in 2011, but sales reached $880 million in 2016. After the transaction is completed, the Chewy team operates independently and integrates Pet360.

However, affected by the epidemic, supply chain and inflation, pet stocks that used to be popular have also been hit hard. Us stock Chewy has fallen 63.79 per cent in the past year and 33.8 per cent since the beginning of the year; Freshpet (FRPT) has fallen 41.62 per cent in the past five years and 8.21 per cent since the beginning of the year; and Petco (WOOF) has fallen more than 10 per cent so far this year.

Hot "it economy", calling for love in the global center

It is not only the mature pet market in Europe and the United States, but also in China, young people who pursue both cats and dogs are very "willing" to love their pets, which is very obvious in the recent IPO market.

In December last year, the official website of the China Securities Regulatory Commission released Fubei pet pre-disclosure updated prospectus, A shares ushered in a pet food manufacturer; in the same month, Zhongheng Pet, an "export giant" whose revenue depends on overseas demand, submitted an application for IPO listing on gem.

According to the 2021 White Paper on China's Pet Industry produced by big data platform, a guide to the pet industry branch of the China Animal Husbandry Association, released in January, the penetration rate of pets in Chinese households is about 20%. The penetration rate in neighboring Japan is about 38%, which still has a lot of room to rise.

At the same time, the report points out that the characteristics of Chinese pet owners include high education, high income, low age and low pet age. Nearly 90% of pet owners have a college degree or above; 46.7% of pet owners earn 4000-9999 yuan a month, and 34.9% of pet owners earn more than 10000 yuan a month, more than 1max 3. High education and high income often mean stronger spending power.

The "hot" of the pet track is not one or two days. Enterprise survey data show that there are more than 920000 related enterprises with "pet products" in the business scope of our country. Moreover, as of June 2021, China has added more than 100000 enterprises of pet-related products and services. At the same time, more and more Internet giants have set foot in the pet track.

Last year, Tencent invested 13.84% in Pet Home, an integrated pet services platform, which includes pet services and retail. It is worth mentioning that in May, Tencent bought a stake in another pet service brand pet pet.

XIAOMI, who has always used smart hardware as a starting point, has also invested in the pet smart hardware brand "Cat and Dog" in 2019. In addition to major technology manufacturers, traditional brands such as Lake, Little Bear and Yadu have also launched their layout in the pet smart products market.

Are you ready to face the "it economy"?