KKR and CD&R to bid $7.5 billion for US pet food retailer PetSmart
20 Nov 2014
Private equity firms KKR & Co and Clayton, Dubilier & Rice (CD&R) have teamed up to bid for US pet food retailer PetSmart Inc, Reuters yesterday reported citing people familiar with the matter.
Petsmart had in August said that it would explore strategic alternatives for the company to maximise value for shareholders, including a possible sale.
The announcement came after the company came under pressure from major shareholders like Jana Partners with a 9.8 per cent stake and Longview Asset Management with a 9 per cent, who felt the company was under-performing.
It has since been working with JP Morgan Securities and Wachtell, Lipton, Rosen & Katz assisting in the process.
The report said that KKR and CD&R will table a more than $7.5 billion bid to take PetSmart private.
Other private equity firms Apollo Global Management and BC Partners are also interested in bidding for PetSmart, the report added.
Bids are expected to be tabled in early December, and PetSmart is expected to announce the winning bid in mid-December.
Founded in 1986, Phoenix-based PetSmart is the largest specialty retailer of pet supplies in the US.
It employs around 53,000 people and operates 1,352 stores and 200 in-store PetSmart PetsHotels dog and cat boarding facilities in the US, Canada and Puerto Rico.
It also holds a 20.5 per cent stake in Medical Management International, the operator of Banfield Pet Hospital.
The company has a market cap of $7.8 billion and posted net income of $420 million last year on revenues of $6.8 billion.
