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Private investors purchase PetSmart

Article By: ,  Financial Analyst
December 15, 2014 12:26 PM

US pet products retailer PetSmart has been sold in the largest debt-funded deal of 2014.

A group of private investors, headed up by BC Partners, have purchased the chain store for $8.7 billion (£5.5 billion). BC Partners is set to pay $83 a share as part of the takeover, it is a significant increase on PetSmart's closing price on Friday (December 12th) of $77.67. Jana Partners, StepStone and Canadian pension manager La Caisse are also part of the investment group with the former purchasing a stake in PetSmart earlier in the year.

Jana Partners has been named as an "activist" fund and paid $55 per share on average when it made its first foray into business with PetSmart. The investor has been pushing for a full sale of the company since the summer and in August there was confirmation that the wheels were being put in motion to find a buyer.

PetSmart has been performing reasonably well in recent months. In November, the company announced a sales increase of 2.6 per cent to $1.7 billion alongside its third quarter net income to $92.2 million. This is despite fierce competition from the likes of Amazon and Wal-Mart in the pet goods sector.

David K. Lenhardt, PetSmart's president and chief executive officer, said: "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."

PetSmart boasts over 1,300 locations across the US, Canada and Puerto Rico specialising in services such as grooming and dog training. It also sells a number of animals such as birds, fish, amphibians and various breeds of gerbils, guinea pigs and mice.

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