Reports out of Hong Kong indicate that Petsmart, the erstwhile small pet and pet supply store has been acquired by BC Partners in an 8.7 billion dollar buyout. If the numbers hold, the acquisition will be the largest private equity transaction of its nature this year. BC Partners and associate investors have agreed to pay $83 a share in addition to a 39 percent premium from the pet retailer’s stock price prior to its publicized exploration of prospective sale in early July.
BC Partners’ representative Raymond Svide sounded upbeat saying they were pleased to add Petsmart to their portfolio of investments because Petsmart is an iconic brand and the category leader in the ever-growing retail pet industry.
Company shares have continued to rise since investor Jana Partners urged the retailer’s ownership to consider putting the company up for sale. While there are challenges ahead for the retail supplier whose sales have been sluggish of late, with BC Partners’ desire to implement cost cutting initiatives designed to cut costs in the range of $200 million, the company is looking toward steady growth.
There are some 1,400 Petsmart retail outlets in North America offering both traditional pet store fare as well as non-traditional accouterments including the boarding of pets, grooming, medical and adoption services.The pet industry is huge and is projected to do record numbers in the years ahead. BC Partners is positioning itself to be a player in the projected growth of the pet industry, and as Petsmart is acquired by the company, the prospective partnership plans on playing an integral role in that growth in the years ahead.
By Matthew R. Fellows
Photo By: Mike Mozart Flicker License