Petmate, the Platinum Equity-owned pet company, is nearing a deal to restructure its balance sheet and transfer control to its lenders after consumer demand for its products proved insufficient to satisfy its debt obligations, WSJ Pro Bankruptcy reported. The company has engaged the law firm Milbank to advise on the restructuring, which could take place either in or out of a bankruptcy court. A group of lenders is working with the law firm Gibson Dunn & Crutcher and is in discussions with Petmate over its proposed reorganization plan. Under the proposal, Petmate lenders would swap much of the roughly $750 million of debt for equity in the company. The deal would reduce Petmate’s debt by about $600 million. Platinum, the Beverly Hills, Calif.-based private-equity firm led by Tom Gores, last year provided Petmate with a loan to help buy the company some time to work out a restructuring plan. Petmate has been operating since 1959 and is known for its dog kennels, houses, toys, and other canine treats and accessories. Platinum acquired the company in 2021. Petmate subsequently faced earnings erosion as pet owners scaled back spending due to inflation and sought lower-cost options.
