PetSmart to be acquired by BC Partners in $8.7bn deal making it the largest leveraged buyout of the year

PetSmart Rt. 1, Saugus, Massachusetts

Under the terms of the deal announced on Sunday, BC Partners-led consortium will pay about $83 a share in cash

Petsmart, the US pet supplies retailer said Sunday that it has approved to sell itself to a consortium led by private equity firm BC Partners Inc. in a deal valued at about $8.7 billion. The agreement represents the largest leveraged deal for a U.S. company this year that has been defined by huge mergers, most of which have been by corporate buyers and not private equity firms.

Gregory Josefowicz, Chairman of PetSmart said, “We are pleased to have reached this agreement with BC Partners, which maximizes value for all of our shareholders and best positions PetSmart to continue to meet the needs of pet parents. This transaction represents the successful conclusion of our extensive review of strategic alternatives.”

The Phoenix, Arizona-based PetSmart disclosed in August that it was exploring a sale after coming under pressure from activist investor and hedge fund Jana Partners LLC as well as other shareholders to sell itself. Jana Partners emerged as a major shareholder with a 9.9 percent stake in PetSmart. The pet supply company had already been weighing its strategic options as its sales had begun to decline.

The month long auction of PetSmart, overseen by JPMorgan and law firm Wachtell, Lipton, Rosen & Katz eventually drew the interest of some of the largest private equity firms, including Apollo Global Management, Kohlberg Kravis Roberts and Clayton Dubilier & Rice. Last week’s media reports had indicated that New York-based Apollo Global Management LLC was nearing a deal to buy PetSmart. Ultimately, BC Partners reportedly beat other bidders to emerge as the winner.

Under the terms of the deal announced on Sunday, BC Partners-led consortium will pay about $83 a share in cash, that’s about 6.8 percent higher than PetSmart’s closing price on Friday and about 39 percent higher than the company’s closing price on July 2, the day before prominent activist hedge fund emerged as a shareholder.

In addition to BC Partners, the consortium includes several of its limited partners like StepStone and Canada-based institutional fund manager La Caisse de dépôt et placement du Québec. Longview Asset Management, which owns or manages about 9 percent of PetSmart’s outstanding shares, says it will vote in favor of the deal. The transaction is subject to shareholder and regulatory approval and is expected to close in the first half of 2015.

PetSmart has about 54,000 employees and operates 1,387 pet stores in the United States, Canada and Puerto Rico. The company also manages about 201 in-store PetSmart PetsHotel dog and cat boarding facilities.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Panasonic hopes Blue Yonder acquisition will improve its software woes

Panasonic hopes Blue Yonder acquisition will improve its software woes

Most Japanese major companies, which at one time were leaders in consumer electronics, are struggling to find their feet in a world that has moved to digital software. Electronics
8 hours ago
Ikea and Rockefeller Foundations to raise $10 billion for renewable energy projects in poor countries

Ikea and Rockefeller Foundations to raise $10 billion for renewable energy projects in poor countries

The Ikea and Rockefeller foundations are jointly launching a $10 billion fund to promote small-scale renewable power projects in developing nations. Both
2 days ago
EC initiates another probe into Google’s adtech practices

EC initiates another probe into Google’s adtech practices

EU antitrust regulators are planning a formal investigation into Google’s digital advertising practices by the end of this year. Google is already facing unprecedented regulatory
2 days ago
Some Microsoft employees stayed at data centers during Pandemic to keep all systems going

Some Microsoft employees stayed at data centers during Pandemic to keep all systems going

The Covid-19 pandemic ravaging the world for more than a year has forced companies and organizations to find viable solutions to keep the business going. Most found a solution in w
2 days ago
Meme stocks frenzy and 3 companies to follow

Meme stocks frenzy and 3 companies to follow

The doom and gloom about the stock market that has been predicted since the pandemic started has abated somewhat with the resilience shown by investors (helped by low-interest rate
2 days ago
US Space Force allows repurposed SpaceX rocket to launch GPS satellite

US Space Force allows repurposed SpaceX rocket to launch GPS satellite

A GPS navigation satellite built by Lockheed Martin is set to ride a reused SpaceX booster on a launch from Cape Canaveral, Florida, Thursday. It will be the first time a military
4 days ago