PetSmart has entered into an agreement to be acquired by an investment consortium led by BC Partners. The transaction is valued at approximately $8.7 billion, representing a 9.1x multiple of PetSmart’s adjusted EBITDA for the twelve months ending November 2, 2014. The consortium includes BC Partners, La Caisse de dépôt et placement du Québec, and StepStone. Longview Asset Management, which owns approximately 9% of PetSmart’s outstanding shares, has committed to vote in favor of the transaction. The transaction is expected to close in the first half of 2015.
“We are very pleased to add PetSmart to our portfolio of investments. PetSmart is an iconic brand and the category leader in the growing pet retail industry. We look forward to working with management to continue growing PetSmart’s business and executing against its recently announced strategic initiatives,” said Raymond Svider, a Managing Partner at BC Partners.
PetSmart (NASDAQ: PETM) is the largest specialty retailer of pet products and services. The company has approximately 54,000 employees and operates approximately 1,387 pet stores in the United States, Canada and Puerto Rico and approximately 201 in-store PetSmart® PetsHotel® dog and cat boarding facilities. The company is headquartered in Phoenix (www.petsmart.com).
BC Partners has €12 billion of capital under management and invests in companies in a variety of sectors that have significant European operations. The firm was founded in 1986 and has offices in London, Paris, Hamburg and New York (www.bcpartners.com).
“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 Josefowicz, Chairman of PetSmart. “This transaction represents the successful conclusion of our extensive review of strategic alternatives.”
The consortium has received fully committed debt financing in connection with the transaction from Citigroup, Nomura, Jefferies, Barclays and Deutsche Bank.
J.P. Morgan Securities is serving as the exclusive financial advisor to the company, and Wachtell, Lipton, Rosen & Katz is serving as the company’s legal advisor. BC Partners and its consortium investors were advised by Simpson Thacher & Bartlett and Ernst & Young. Longview was represented by Skadden, Arps, Slate, Meagher & Flom.
2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14