Chewy.com Prices its IPO Above Expected Range

Chewy.com, the online business of PetSmart, is going to be making its debut in the stock market.

This week the company priced its IPO at $22 a share, above the expected range.

It was in 2017 that PetSmart purchased Chewy for around $3 billion. The company was founded by Ryan Cohen and Michael Day in 2011. Last year the company had reported $3.5 billion in sales. In 2017 this figure was $2.1 billion. The company has not yet turned a profit however.

After the IPO, PetSmart will be the majority owner of the company. PetSmart will own about 70% of the company’s common stock and hold approximately 77% voting power. The two companies will continue to coordinate purchases, giving both stronger bargaining power, Chewy said in IPO registration documents.

According to a person familiar with the offering, it raises a little over $1 billion and valuates the company at $8.8 billion.

The company will use proceeds from the offering for working capital and general corporate purposes, according to the filing.

”[Chewy] benefits from the large market of 85 million households who love their pets,” remarked Kathleen Smith, principal at Renaissance Capital.

Chewy said in its prospectus that it is looking for continued growth by broadening the array of products it offers, finding new customers and expanding further into pharmacy.

Chewy will list on the New York Stock Exchange and will trade under the ticker symbol “CHWY.”
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