Sentinel Capital Partners has acquired Pet Supplies Plus (PSP), the third largest pet specialty chain in the US, from Irving Place Capital.
Pet Supplies Plus (PSP) is a franchisor and operator of pet-specialty stores. PSP’s system spans 33 states and is currently comprised of 448 stores, split evenly between franchised and company-owned locations. PSP also operates a distribution network that provides scale, profitability, and competitive operational advantages to its franchisees.
PSP founders, Harry Shallop and Jack Berry, opened their first store in Redford, MI in 1988. Today the company is headquartered near Detroit in Livonia, MI (www.petsuppliesplus.com).
“PSP is the #1 pet franchise system in the US with an expanding footprint and a large white-space opportunity,” said Marc Buan, a principal at Sentinel. “The pet industry is very attractive due to its stability, growth, and passionate consumer base. PSP has a strong position in the pet retail segment and a very loyal customer base. Led by a highly committed and talented management team, PSP has delivered consistent performance and steady growth. We are excited to partner with PSP during the next phase of its growth.”
PSP stores measure from 5,000 sq. ft. to 9,000 sq. ft. and are focused on being neighborhood pet supply “supermarkets,” stocking a wide selection of pet food and supplies. The stores have limited live pet departments, and some have also recently added grooming services and self-serve dog washes.
“PSP combines the convenience, expertise, and high-touch experience of a local neighborhood pet store with the curated selection and value of a national player,” said Chris Rowland, CEO of PSP. “We look forward to partnering with Sentinel, a firm with deep franchising expertise, to help us drive revenue growth and geographic expansion.”
Sentinel Capital Partners invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $65 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).
Since being acquired by Irving Place Capital (IPC) in September 2010, PSP has opened more than 200 additional store locations and expanded its geographic footprint into 11 additional states. “Irving Place Capital has been a key partner in transforming our business into one of the most successful players in pet specialty retail,” said Mr. Rowland. “The IPC team, which includes seasoned industry executives and operational resources, has worked closely with our team to accelerate growth and enhance profitability while making significant investments in systems and supply chain. We are incredibly well positioned to capture the growth opportunities ahead.”
Irving Place Capital is a mid-market private equity firm that invests in North American or Western European-based companies that are active in the industrial, packaging, consumer and retail industries. Transaction types include buyouts, recapitalizations, build-ups, corporate divestitures, take-privates and distressed-to-control situations. The firm was founded in 1997 and is headquartered in New York (www.irvingplacecapital.com).
“We have enjoyed a close partnership with the management team at Pet Supplies Plus. During the course of our investment, the company has established itself as the retailer of choice for leading pet specialty brands, built a highly successful customer loyalty program, and continued to attract the strongest franchise partners as it rapidly expands its store footprint,” said Devraj Roy, a partner at Irving Place Capital. “We wish the team continued success going forward.”
Baird (www.rwbaird.com) and Houlihan Lokey (www.hl.com) were the financial advisors to PSP on the transaction.
© 2018 Private Equity Professional | December 13, 2018