A potential merger is on the table that will create a single company that holds 30% of the pet specialty stores in the United States. Petco Holdings Inc will potentially be acquired by PetSmart Inc. Over the past year, Petco had approximately $4 billion USD in sales and PetSmart had $7.1 billion USD in sales. IBISWorld estimates that PetSmart and Petco bring in more than half of America’s pet store revenue.
In 2014, PetSmart was working with Petco on a merger however PetSmart withdrew from the deal and was bought by BC Partners Ltd for $8.7 billion USD. At that time, revealing confidential information to a large competitor may not have received antitrust clearance.
Currently Petco is owned by TPG Capital LP and Leonard Green & Partners LP. Last month Petco was registered for an initial public offering that valued the company at approximately $5.5 billion USD including debt. While the company registered for an IPO, it is also potentially for sale and Petco officials have been involved in discussions with private equity firms.
Informal talks have taken place between PetSmart and Petco with the goal of increasing the price of Petco. PetSmart has yet to be given access to Petco’s confidential information. Currently, none of the parties involved are willing to publicly discuss any information pertaining to potential negotiations.
No comments:
Post a Comment