U.S. pet-supplies retailer PetSmart Inc. has agreed to a deal with a group of private investors in which it will sell its business for $8.7 billion.
The agreement made with London-based BC Partners is potentially the biggest private-equity deal of 2014, with the Phoenix-based company saying Sunday the investor group agreed to pay $83 for each share, according to azcentral.com.
PetSmart currently operates about 1,400 stores, and pet food makes up about half of the company's revenue. While a spokesman for the retailer didn't provide any extra details about the acquisition, a BC Partners executive said he was looking forward to working with PetSmart management.
"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 David Lenhardt, President and CEO of PetSmart.
BC Partners' payment is much higher than Friday's closing price of $77.67, BBC News reported.
The deal comes at a time when PetSmart faces competition from Wal-Mart, Amazon and other retail giants. The company reported a third-quarter net income of $92.2 million and a sale increase of 2.6 percent to $1.7 billion in November.
PetSmart sells close to 12,000 different items in stores and an additional 8,000 on its website and other online sites, azcentral.com reported. Products include pet food, supplies, grooming, boarding and veterinarian services, all sold at different locations.
The retailer ranks as the 36th-largest non-government employer in Arizona in the 2014 edition of the Arizona Republic 100. The PetSmart Charities, which places cats and dogs for adoption, is ranked as one of the biggest non-profit groups in Arizona.
"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," Lenhardt said.
