Two private equity firms, Texas Pacific Group and Leonard Green & Partners, have reached a deal with San Diego-based Petco Animal Supplies to acquire the pet supplies retailer for $29 per share, in a $1.8 billion (€1.4 billion) cash deal, including the assumption of Petco’s debt.
The pet supplies industry in general has taken a hit recently, due in part to a downturn in discretionary spending among consumers. Petco has also faced stiff competition nationwide from Phoenix, Arizona-based rival retailer Petsmart. As part of the merger agreement, the retailer said it will conduct a market test for 20 days, ending on August 10.
“Upon completion of the transaction, Petco will be a private company that will have greater flexibility to accomplish its long-term plans, which, we believe, will be favorable for the company’s associates and suppliers and the customers we serve through more than 800 stores nationwide,” said Petco CEO James Myers in a statement.