06/03/2019’s IPO will be worth…

PetSmart subsidiary is coming closer to launching its planned IPO.

Chewy, which offers more than 45,000 products through its website and mobile apps, has set a price range of $17 to $19 for 41.6 million shares of stock. The e-tailer intends to raise $749 million from selling the shares, which are 87% insider. The midpoint of this valuation range would set Chewy’s fully diluted market value at $7.6 billion.

The shares have been approved for listing on the New York Stock Exchange under the ticker symbol "CHWY.” Chewy, which was purchased by PetSmart in May 2017 for about $3 billion in cash and lien notes in May 2017, filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission in April.

According to a report from digital intelligence firm Jumpshot, Chewy made strong improvements in 2018, growing its online transactions by double-digit percentages and carving out a retail niche. But it remains unprofitable. During fiscal 2018, Chewy’s sales rose about 75% to $3.5 billion from $2.1 billion. Its net loss shrank to $268 million from $338 million.

Chewy intends to use its net proceeds from this offering for working capital and other general corporate purposes. PetSmart will remain majority owner of Chewy and intends to apply funds generated by the sale of shares owned by one of its subsidiaries to working capital and general corporate purposes.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Allen & Company LLC are acting as joint lead bookrunning managers for the offering. BofA Merrill Lynch, Barclays Capital Inc., Jefferies LLC, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC are also acting as joint bookrunning managers. Nomura Securities International Inc., Raymond James & Associates Inc. and William Blair & Company LLC are acting as co-managers.