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🟡 FORMERLY PE OWNED
Petco
pet supplies · San Diego, CA
PE Firm
CVC Capital, CPPIB
Year Acquired
2016
“CVC loaded $3.3 billion in debt onto a pet store, IPO'd it to pay themselves back.”
What Happened
- •CVC and CPPIB acquired Petco for $4.6B in 2016; four years later still carried $3.3B in debt with no meaningful paydown
- •Moody's downgraded Petco to Caa1 in 2020, citing 'high financial leverage that stems from the acquisition'
- •Third IPO in 2021 raised $864M primarily to service PE-era debt; stock subsequently cratered as sales declined
- •Closing ~25 stores per year in 2024-2025 with bankruptcy speculation from CreditRiskMonitor
The Damage Done
- ▸Cut nearly 5,000 employees while adding 59 stores — average staff per store dropped by one-fifth
- â–¸Documented pet deaths during grooming, including dogs dying from heat stroke in kennel dryers
- â–¸Hundreds of employees signed a 2020 letter reporting stores 'lack basic safety precautions' and had 'drastically cut hours'
- â–¸Closed 25 net stores in 2024; credit rating agencies gave Petco near-worst rating with almost 10% bankruptcy probability