PetSmart Fetches $8.7B In Biggest P.E. Deal Of ‘14

Dec 15 2014 | 12:47pm ET

The biggest private-equity deal of the year had to wait until it was almost over.

BC Partners yesterday agreed to pay $8.7 billion for retailer PetSmart. The company beat out several private-equity giants, including Apollo Global Management, Clayton Dubilier & Rice and Kohlberg Kravis Roberts for the company, which has been under hedge-fund pressure to sell itself. Indeed, Apollo was widely seen as the favorite to buy the company.

The deal amounts to a roughly 7% premium to PetSmart’s closing price on Friday, and short-circuits a potential proxy battle with Jana Partners, which owns nearly 10% of the company. Jana had been preparing a dissident slate for election to PetSmart’s board pending completion of its strategic review.

Jana wasn’t alone in pushing for change: Longview Asset Management also sought a sale; it will remain a minority shareholder in the privately-held PetSmart.

The transaction is expected to close in the second quarter.


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