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PetSmart expands online through Chewy acquisition
Posted on Thursday, 20 April 2017 09:56
PetSmart, one of the largest pet and pet product retailers in the US, has reached an agreement to acquire online peer to extend its Internet-based operations amid a changing market.

While the two companies did not disclose the value of the deal, a report by Recode, which cited people familiar with the matter suggested the transaction is worth around USD 3.35 billion.

Such a proposal, expected to close in the second quarter of 2017, would make the acquisition one of the largest in the retail industry this year, according to Zephyr, the M&A database published by Bureau van Dijk.

Chewy is billed as one of the leading online pet products sellers in North America and will be highly complementary to PetSmart’s brick and mortar footprint, with 1,500 stores and 55,000 associates across North America as consumers continue to prefer shopping from the comfort of their homes.

The two groups believe that together they can offer the widest range of products in the region both in-store and online.

Chewy, founded in 2011 by Michael Day and Ryan Cohen, who is expected to retain his position as chief executive following closing, booked revenues of around USD 900.00 million in 2016, Recode reported.

According to the article by the technology news provider, Chewy had also been exploring an initial public offering prior to the announcement; however, in light of the recent deal, these plans have been abandoned.

Zephyr shows that at USD 3.35 billion the acquisition would be the third largest announced in the retail industry since the start of the year.

The most valuable featured Walgreens Boots Alliance buying pharmacy chain Rite Aid for USD 14.28 billion, which was followed by the USD 5.00 billion takeover of outdoor equipment firm Cabela’s by Bass Pro Group.

PetSmart was acquired by a consortium led by BC Partners for USD 8.70 billion in 2015 and the purchase of Chewy would be its first since coming under new ownership, according to Zephyr.

© Zephus Ltd