By David Benoit and Dana Mattioli
PetSmart Inc. agreed to be bought by a group led by BC Partners
Inc. for about $8.25 billion, in the largest private-equity buyout
of the year.
The group agreed to pay $83 a share for the pet-supply retailer,
according to a statement. Besides BC, the group includes some of
its limited partners as well as Longview Asset Management LLC,
which controls a roughly 9% stake in PetSmart and under the deal
would continue to hold some of that.
BC prevailed in the auction over rival buyout firm Apollo Global
Management LLC.
PetSmart began contemplating a sale this summer amid pressure to
do so from shareholders including Longview and activist investor
Jana Partners LLC.
Jana disclosed a 9.9% stake in the company in July. Days after
that, Longview, a longtime PetSmart investor, sent the board a
letter urging it to hire bankers to consider a deal or other
options.
The takeover would be a rare private-equity buyout in a year in
which such firms have been priced out of the
mergers-and-acquisitions market by lofty stock prices.
PetSmart, which was founded in 1987, has about 1,350 stores,
more than half of which contain full-service veterinary hospitals,
according to securities filings.
The Phoenix retailer has given up market share to competitors
such as Target Corp. and Wal-Mart Stores Inc., as well as
e-commerce giant Amazon.com Inc.
A number of retailers have come under pressure in recent years
as consumers changed shopping habits and began shopping online
more. Last year, office-supply retailers Office Depot Inc. and
OfficeMax Inc. merged. In the dollar store category, both Dollar
General Corp. and Dollar Tree Inc. are currently trying to buy
Family Dollar Stores Inc.
Write to David Benoit at david.benoit@wsj.com and Dana Mattioli
at dana.mattioli@wsj.com
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