UK-based BC Partners to acquire PetSmart for $8.7bn

A private equity consortium led by London-based BC Partners has inked an agreement to acquire US retailer PetSmart for $8.7bn.

Nasdaq-traded PetSmart will be taken private post the deal, which has been approved by the board of the pet products retailer and now requires shareholder approval.

PetSmart, in a 14 December statement, said the buyout price represents a 39% premium to its "unaffected closing share price" of $59.81 on 2 July.

The buyout represents a 9.1x multiple of PetSmart's adjusted EBITDA for the twelve months ending 2 November, 2014.

Gregory P Josefowicz, PetSmart's chairman, said in the statement: "...This transaction represents the successful conclusion of our extensive review of strategic alternatives."

Raymond Svider, a Managing Partner at BC Partners, said: "...PetSmart is an iconic brand and the category leader in the growing pet retail industry..."

PetSmart's stock finished at $77.67 in New York trade on 12 December, valuing the firm at $7.72bn (£4.9bn, €6.2bn).

PetSmart revealed in August that it would explore a potential sale of itself.

New York-based activist investor Jana Partners began pushing PetSmart to explore a sale after disclosing a 9.9% stake in the firm on 3 July. Jana paid less than $55 per share on average for its stake in PetSmart, according to regulatory filings.

The PetSmart deal is the second major leveraged buyout triggered on by the Barry Rosenstein-run Jana this year.

In May, Jana sold its position in US grocery store operator Safeway after Safeway and rival Albertsons announced a merger deal valued at about $9bn.