CVC Capital Partners / CPPIP to acquire Petco for $4.7 billion
Nov 23 2015
Multiple media reports say the Canada Pension Plan and Investment Board and private equity firm CVC Capital Partners Ltd. are close to a deal to buy the chain, which is valued at $4.7 billion US.
TPG and Leonard Green had also registered Petco with regulators for an initial public offering, which they would have proceeded with if offers for the company were far below their valuation expectations.
The two private equity firms bought Petco back in 2006 for $1.68 billion.
The people asked not to be identified because the negotiations are private. TPG and CVC declined to comment, while Petco, CPPIB and Leonard Green did not immediately respond to requests for comment.
Net income jumped about 43 per cent and had over $2 billion in debt, according to the filing.
The company's revenue had risen 12 per cent in the 26 weeks through 1 August from the same period a year ago, according to the filing.
And they're also a reflection of the high level of competition these days, with general retailers like Target and even grocery stores getting into the pet supplies business. The deal may be announced as soon as this week, the people said.
This likely deal comes at a time that proves challenging for private equity firms as the jerky finance markets have proved to be difficult for them to secure the amount of debt which they are used to make investment returns juicier.
Rival PetSmart previous year was bought by a London-based private equity firm and took that company private in order to restructure and aim for growth.
The New York Times adds that TPG Capital and Leonard Green took Petco, which sells food and supplies for pets in more than 1,400 stores throughout the United States, public in 2002.