Wag Of Approval For PetIQ

Upcoming IPO

Pet medication distributor, PetIQ Inc. (Pending: PETQ), is expected to make its market debut on Friday (7.21.17). The company expects to raise $85M through the offering of 5.7M shares at a price range of $14-$16. Assuming PetIQ prices at the mid-point of its proposed price range, the company would command a fully diluted market cap value of $312.3M. The deal is currently oversubscribed.

We previously previewed this deal on our IPO Insights platform.

Underwriters for the IPO include: Jeffries LLC, William Blair & Co., LLC, Oppenheimer, Raymond James & Associates, and SunTrust Robinson Humphrey.

Business Overview

PetIQ is a manufacturer and distributor of low-cost pet medications and other health products for cats and dogs. Currently, PetIQ is the leading seller to the retail channel of pet products. Its product line includes more than 240 SKUs and includes Rx medications, OTC medications and supplies, health and wellness products, treats, and other supplements.

(S-1/A)

It operates facilities in Daytona Beach, Florida, and Springville, Utah as well as relies on third parties to manufacture products. Products are distributed across multiple retail channels such as mass market, clubs, food and drug, online, pharmacies, and pet specialty outlets. Majority of sales come from the following retailers: BJ’s Wholesale Club, Target, Kroger, Petco, PetSmart, Costco, Sam’s Club, and Wal-Mart, in addition to over 40,000 retail pharmacy locations.

Traditionally, customers purchased pet medications from veterinary clinics; however, more and more customers are choosing to purchase these from retail channels instead. PetIQ is well positioned to benefit from this migration from selling through veterinarians to retail channels. Additionally, the pet market has been growing quickly and the potential passage of the Fairness to Pet Owners Act of 2017, currently pending in Congress, which will make it easier to get pet prescriptions through retailers could also boost PetIQ sales.