But no shorting here? ....Maybe the operative word is ‘yet’....

But no shorting here?
....Maybe the operative word is ‘yet’.

Looking a bit more at the newest substantial holder PETstock, it seems it was for sale, or tested for sale, almost exactly two years ago /which was around one year after the J/V with Apiam was signed).,

The rumoured sale was to TPG, and this was soon after TPG had bought pet and vets group Greencross.
- Lots of interest in the animal kingdom by the financial ones?

Spoiler : AFR 11/03/19

https://www.afr. com/street-talk/rollup-rollup-tpg-adds-family-owned-pets-vets-business-to-greencross-20190310-h1c7hh
Roll-up, roll-up; TPG adds family owned pets, vets business to Greencross
Sarah Thompson and Anthony Macdonald
Mar 11, 2019 – 12.15am


The private equity job has started at Greencross.
Street Talk understands Greencross' new owner TPG Capital is set to buy the country's second largest pet goods retailer, PETstock.
PETstock is a family-owned operation that started about 15-years ago in regional Victoria and has grown to have more than 100 stores and veterinary clinics across the country and has an established online business.

It is understood the business makes about $25 million a year at the EBITDA line, which would likely make it a $150 million to $200 million-odd proposition for TPG, and comes less than one month after it paid about $1 billion for Greencross.

It appears to be a bigger is better play for TPG which would know that it needs to compete with Australia's big supermarkets, where the majority of petfood is bought, and prepare for increased competition in specialty pet products from Amazon.

It makes sense to seek synergies in such an environment, and it wouldn't surprise to see TPG's dealmakers pursue more bolt-on acquisitions to Greencross' network in coming years.


PETstock is majority owned by members of the Young family who started the business in 2002.
The family initially owned Ballarat Produce, before building out the wider PETstock network as a pet specialty retailer and franchiser operating through retail stores and veterinary clinics in Australia and New Zealand.

PETstock reported $259.3 million revenue in the 2018 financial year and a $6.9 million profit after tax, according to accounts filed with the corporate regulator. Revenue and profit were both up more than 10 per cent in the reporting period, while the company had total assets worth $119.3 million as at June 30 last year.

It comes as TPG's bankers widen their search for buyers of the pet group's underlying debt, as reported by Street Talk last week. TPG's bankers, Credit Suisse and UBS, have turned their attention to attracting Asian investors to the loan offering.

For TPG, the deal comes as its team puts to work a new $US4.6 billion-plus ($6.4 billion-plus) Asia fund that closed last month. The raising closed with about half of the fund already promised to bankroll deals, including Greencross and the former Healthscope Asian pathology business.

cheers


PS FWIW to anyone out there here’s a share of an Australian ‘Data Room’ report about that proposed sale which gives background to the sector .

Spoiler : 19/02/19 PwC pet project could yield $200m

PwC’s pet project could yield $200m​

• BRIDGET CARTER DATAROOM EDITOR, SCOTT MURDOCH FORMER JOURNALIST AT THE AUSTRALIAN
• 12:00AM FEBRUARY 19, 2019

Online pet care company Pet Stock is believed to be contemplating a sale through PwC.

However, a company spokesperson has denied that any moves are afoot to divest the business.
The Australian-owned and operated business was founded in 2002 by the Young family in regional Victoria.

It sells pet supplies, along with offering dog day care, cat boarding, pet adoption, puppy school, vet services and grooming.
It has close to 200 locations throughout Australia and has expanded into the New Zealand market.

Expectations are that should the business be for sale, it could fetch about $200 million.
Pet care remains a popular sector among private equity firms due to the growing amount pet owners spend on their animals.
However, the sector overseas remains under strong pressure from big online operators such as Amazon and major discount department stores as they increase their presence in the space.

Pet Stock is no doubt testing buyer appetite following the acquisition of its larger rival Greencross by private equity outfit TPG Capital for a massive $930 million.
US-based TPG last year agreed to buy Greencross for $5.55 per share.

That was a lucrative premium of at least 44.5 per cent to the one-month weighted average share price before the bid was announced.

Greencross shares traded as high as $10 in 2014, and two years later TPG tried to buy the business for $6.75 per share.

This was only two years after the merger of Petbarn owner Mammoth Pet Holdings, of which TPG held a major stake, with Greencross.

It will be interesting to see if Pet Stock considers an initial public offering.
Another possibility is that a buyout fund acquires an equity interest rather than the business as a whole.