PetSmart Inc., one of the largest U.S. pet store chains, has agreed to be taken over by an investment group in a transaction valued at $8.7 billion. The tentative deal is expected to have no effect on the more than 800 Banfield veterinary hospitals that operate inside PetSmart stores. “Banfield Pet Hospital has an agreement that governs its relationship with PetSmart which, by its terms, is not affected by a change in PetSmart ownership,” the Portland, Ore., veterinary chain noted. “Banfield will continue to operate its hospitals as usual.” The sale, announced Sunday and subject to the approval of PetSmart shareholders and regulators, is led by the London-based private equity firm BC Partners and two other investors: Quebec-based La Caisse and New York-based StepStone. Longview Asset Management of Toronto, Canada, has held a 9 percent stake in PetSmart and will vote in favor of the transaction, PetSmart reported. The sale is priced at $83 a share, a significant jump from mid-June, when PetSmart stock was trading at under $58. “This transaction is a testament to the strength of the PetSmart brand and franchise and reflects the dedication and commitment of our 54,000 associates to serving our customers and delivering value for our company and our shareholders,” said PetSmart President and CEO David K. Lenhardt. “The consortium led by BC Partners will be an excellent partner for PetSmart as we continue to implement our strategic plan to capitalize on our opportunities for growth and meet the needs of pet parents.” PetSmart operates 1,387 pet stores in the United States, Canada and Puerto Rico as well as 201 in-store PetsHotel boarding facilities. The Phoenix-based retailer agreed over the summer to consider a sale after minority investor Jana Partners accused the chain of “years of underperformance.” PetSmart’s latest earnings report, released Nov. 18, showed third-quarter sales rising by 2.6 percent, to $1.7 billion, and flat comparable-store sales. The sale is a good sign for the pet industry, said George Puro, an analyst with the market research firm Packaged Facts. “This is a vote of confidence for an industry with stable cash flow and a devoted customer base,” he said. The top two retailers in the U.S. pet specialty sector—PetSmart and Petco—capture 20 percent of all pet product sales, according to Packaged Facts.
Posted on: Fri, 19 Dec 2014 12:17:50 +0000
Trending Topics
Recently Viewed Topics
© 2015