PetSmart will sell itself to a consortium led by investment firm BC Partners for approximately $8.7 billion, or $83.00 per share in cash. The transaction was unanimously approved by the PetSmart Board of Directors and is expected to close in the first half of 2015.
The consortium also includes Canadian pension fund La Caisse and global private markets specialist StepStone. Longview Asset Management, owner of approximately 9% of the retailer’s outstanding shares, has committed to vote in favor of the transaction. Longview also will roll over approximately one third of its holdings into the consortium, cashing out the rest of its shares.
The retailer began exploring a sale after undergoing a “thorough review of strategic alternatives undertaken by the PetSmart Board of Directors to maximize shareholder value,” according to a company statement. Pressure to sell stemmed from shareholders including Longview and activist investor Jana Partners after the retailer experienced consistently low e-Commerce sales, according to
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“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,” said Gregory P. Josefowicz, Chairman of PetSmart. “This transaction represents the successful conclusion of our extensive review of strategic alternatives.”
The transaction is subject to shareholder and regulatory approval, as well as other customary closing conditions. The consortium has received fully committed debt financing in connection with the transaction.
This agreement is the largest private equity buyout in 2014, topping Blackstone Group LP’s $5.4 billion purchase of auto parts manufacturer Gates Global LLC in July, according to data from Bloomberg.
