Analysts betting PetSmart will be the leveraged buyout of 2014.
The New York Post carries a story this morning that suggests financing for a PetSmart deal is available. They report banks are tripping over each other to supply the money for a deal. They also report a takeout price that could be as high as $8.45 billion or $82.45 per share.
So, why is PetSmart for sale? Back in August a shareholder activist, Jana Partners, disclosed it had accumulated a 10 percent stake in the retailer and indicated it would push for a sale. Activists look for companies with unrealized value and then take a position that allows them to influence or unlock the value they perceive.
Private equity firms Apollo Global Management, BC Partners, the Carlyle Group, Clayton, Dubilier & Rice and KKR made first rounds bids last month and are presently deciding whether to make binding offers before a Dec. 3 deadline.
The industry is watching this situation closely. The continuing evolution of the Urban Animal industry in the past twelve months has witnessed brands changing hands, aggregation/consolidations at all levels of the value chain, business failures and a significant number of bolt on acquisitions designed to overcome the disruption of social media on client relationships or to shore up the online business model.
PetSmart is one of the largest providers of funds for humane and animal welfare activities. Will new owners continue this investment, will they be satisfied with the return on investment for the brand (goodwill) or will they turn their attention to paying shareholders and recovering the investment? Only history will illuminate the Urban Animal landscape that is now evolving.
So, why is PetSmart for sale? Back in August a shareholder activist, Jana Partners, disclosed it had accumulated a 10 percent stake in the retailer and indicated it would push for a sale. Activists look for companies with unrealized value and then take a position that allows them to influence or unlock the value they perceive.
Private equity firms Apollo Global Management, BC Partners, the Carlyle Group, Clayton, Dubilier & Rice and KKR made first rounds bids last month and are presently deciding whether to make binding offers before a Dec. 3 deadline.
The industry is watching this situation closely. The continuing evolution of the Urban Animal industry in the past twelve months has witnessed brands changing hands, aggregation/consolidations at all levels of the value chain, business failures and a significant number of bolt on acquisitions designed to overcome the disruption of social media on client relationships or to shore up the online business model.
PetSmart is one of the largest providers of funds for humane and animal welfare activities. Will new owners continue this investment, will they be satisfied with the return on investment for the brand (goodwill) or will they turn their attention to paying shareholders and recovering the investment? Only history will illuminate the Urban Animal landscape that is now evolving.
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