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CVC, CPPIB Buy Petco For $4.6B

TPG and Leonard Green & Partners unload Petco, for the second time.
Katie Kuehner-HebertNovember 24, 2015
CVC, CPPIB Buy Petco For $4.6B

San Diego-based Petco Animal Supplies on Monday said that funds affiliated with CVC Capital Partners and Canada Pension Plan Investment Board have entered into a definitive agreement to jointly acquire the pet store chain from a group of investors led by TPG and Leonard Green & Partners for about $4.6 billion. The acquisition is expected to close in early 2016.

“As the North American pet industry continues to grow, Petco is well positioned with a strong brand, differentiated engagement model, and omnichannel strategy,” Petco’s chief executive James M. Myers said in a press release. “Both CVC and CPPIB have outstanding track records and deep retail experience and resources that will help support our growth initiatives.”

“The pet category is a growing and dynamic space within which we believe Petco is ideally positioned to further enhance its leadership position,” said Chris Stadler, CVC Managing Partner. “We look forward to working with our outstanding partners at CPPIB to support the company’s growth as it continues to execute its strategy and plans to capitalize on promising market opportunities.”

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TPG Capital and Leonard Green bought Petco for the second time when it was a public company in 2006 in a $1.7 billion deal, according to Reuters. The two buyout firms had also taken the company private in 2000 for $600 million, and then took it public again in 2002.

TPG and Leonard Green had been hoping to sell the company for more than $5 billion, including debt, sources told Reuters in October.

CVC and CPPIB have secured more than $3 billion in debt financing for the acquisition, Reuters reported on Sunday, citing people familiar with the matter.

Last August, Petco submitted an initial filing for an IPO.