PetSmart fetches buyer for $8.7 billion

After weeks of exploring “strategic alternatives,” PetSmart has agreed to be acquired for about $8.7 billion by a consortium led by London-based BC Partners.

"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."

PetSmart's board of directors voted unanimously for the deal, but the sale requires approval from PetSmart shareholders. The deal should close in the first half of next year, pending regulatory approval.

We are very pleased to add PetSmart to our portfolio of investments," said Raymond Svide of BC Partners. "PetSmart is an iconic brand and the category leader in the growing pet retail industry."

In the third quarter of this year, total sales at PetSmart increased 2.6% to $1.7 billion. Service sales during the quarter increased 6% to $195.3 million. Net income was essentially flat at $92.2 million, but earnings per share increased to 92 cents from 88 cents due to a decline in the number of shares outstanding from the third quarter the prior year.

The company, founded in 1987, has about 53,000 employees and 1,352 stores.