According to Fortune magazine, the London-based private equity firm BC Partners has won the auction for retailer PetSmart Inc. This would suggest that BC Partners bested Apollo Global Management, which until yesterday was the front-runner.
The BC Partners press release indicates a purchase price of $83 per share for the Phoenix-based PetSmart which represents a 6.86% premium over PetSmart’s closing price on Friday.
The value of PetSmart stayed low until activist hedge fund Jana Partners amassed a 9.9% stake in the company earlier this year. The PetSmart board responded by launching an auction process led by J.P. Morgan. Jana had threatened to nominate its own slate of directors if it wasn’t satisfied with the results of the auction, although it’s hard to imagine that it would oppose $83 per share.
Longview Asset Management, PetSmart’s second-largest outside shareholder with a 9.02% position, will roll its shares into the company as part of the BC group. Also participating are several limited partners of BC Partners limited partners, including Canadian firm La Caisse de dépôt et placement du Québec et placement du Québec and StepStone Group.
BC Partners, may be bulking up in animal related assets. It acquired a major animal identification company, Allflex in 2013. Analysts expect to see more purchases as growth slows and a mature Urban Animal value chain continues to consolidate income streams. The acquisition of under valued assets was also a consideration in this purchase.
Industry analysts are watching closely to see how new ownership will change the day to day operations and initiatives of PetSmart.
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