PetSmart has entered into a definitive agreement to be acquired by a consortium led by private equity firm BC Partners, Inc. at a price of $83 per share in cash, representing a premium of approximately 39% over PetSmart’s unaffected closing share price on July 2. The transaction would be valued at approximately $8.7 billion, representing a 9.1x multiple of PetSmart’s adjusted EBITDA for the 12 months ending Nov. 2.
The transaction was unanimously approved by the PetSmart Board and is subject to shareholder and regulatory approval and other customary closing conditions. The consortium has received fully committed debt financing in connection with the transaction. The transaction is expected to close in the first half of 2015.
“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.”
PetSmart’s net sales for the third quarter of 2014 increased 2.6% to $1.7 billion. Comparable store sales were flat, with average ticket increasing 2.4%, and comparable transactions decreasing 2.4%. Services sales grew 6.0% to$195.3 million.
In September, PetSmart announced it had acquired ecommerce pet retailer Pet360 for for $130 million, with the possibility of additional performance-based payments totaling up to $30 million by the end of 2016.