A private equity consortium led by BC Partners Ltd will scoop pet supply retailer PetSmart in $8.7bn deal, said to be the largest private equity deal of the year.
BC Partners as well as some of its fund investors, including La Caisse de dépôt et placement du Québec and StepStone, signed an agreement to pay $83 a share, a 39% premium from the company’s stock price, said PetSmart.
Longview Asset Management, which has a 9% stake in PetSmart, will offload a third of its holding into the deal.
PetSmart chairman Gregory Josefowicz said: "We are pleased to have reached this agreement with BC Partners, which maximizes value for all of our shareholders and best positions PetSmart to continue to meet the needs of pet parents.
"This transaction represents the successful conclusion of our extensive review of strategic alternatives."
The activist investor in PetSmart, Jana Partners LLC, began pressurising the retailer for a sale after disclosing a 9.9% stake in early July.
This was owing to the fact that the retailer was getting squeezed by fierce competition from large retailers, including Wal-Mart Stores Inc and Amazon.
Last month, PetSmart reported flat third-quarter net income of $92.2m as net sales rose 2.6% to $1.7bn.
Besides BC Partners, various buyout firms such as KKR & Co LP and Clayton, Dubilier & Rice LLC, and Apollo Global Management LLC were also eyeing PetSmart, as reported in Reuters.
PetSmart operates 1,387 pet stores.