Investment company BC Partners announced this week that it will be buying PetSmart, the largest pet retail chain in the U.S., for $8.3 billion. (Including debt, the total deal will be worth about $8.7 billion).
BC Partners has reportedly agreed to pay $83 per share. Insiders close to the situation said that the deal was agreed on this past Sunday, and that there were multiple parties bidding on and interested in the retail pet giant. According to Yahoo! Finance, this deal marks the "biggest leveraged deal for an American company this year."
The deal also goes to show not just how lucrative the retail pet sector is as a whole, but also how confident big time investors are in the future of the pet industry, which is said to have an annual market spend of $80 billion. Just ask managing partner at BC, Raymond Svider, who after the news broke was quoted saying, "We feel fortunate."
While most businesses have been down since the "great recession" began in 2007-08, the pet sector has risen steadily on an average of 3.4% per year. According to data, there are more pets than children in the United States today.
PetSmart and PetCo account for over half of all pet industry revenue.
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Dec 16, 2014