It’s official: Pet supplies giant acquires fast-growing online rival

PetSmart has been setting the stage to accelerate its digital offerings. Now it can.



The specialty pet supplies retailer announced on Wednesday, May 31, that it completed the acquisition of Chewy, a leading online retailer for merchandise for pets, ranging from cats and dogs to horses. PetSmart financed the transaction through the offering of $1.350 million of 5.875% senior first lien notes, $650 million of 8.875% senior notes, and proceeds of an approximately $1,000 million equity contribution by PetSmart’s existing investor group and cash on hand, according to the company.



PetSmart will benefit from Chewy’s e-commerce expertise as it continues to expand its online capabilities. Simultaneously, Chewy will focus on its current business strategy and have access to PetSmart’s infrastructure and scale.



Chewy will operate as an independent subsidiary of PetSmart. The company will continue to be led by CEO Ryan Cohen, and he will also serve as a member of PetSmart’s board of directors.



“The addition of Chewy will help accelerate and drive the success of our digital strategy, and the combination will provide customers with the most convenient experience and the widest selection of products and services available, both in-store and online,” said Michael Massey, president and CEO of PetSmart.



“Ryan and his team bring extensive experience in providing customer-focused solutions for pet parents across digital channels, a key strategic focus for PetSmart,” he added. “We look forward to developing new and innovative offerings and continuing to be the trusted partner to pet parents and pets.”



The deal takes a direct hit at PetSmart rival Petco, which is expanding its own online capabilities. For example, on April 4, the company acquired digital pet services company PetCoach, a pet advice website and app that helps pet owners take better care of their pets, connecting them with veterinarians for personalized answers to their questions.