From Petfood Industry:
PetSmart Inc. is exploring the possibility of acquiring Petco Holdings Inc., according to reports.
The two companies explored a merger possibility in 2014, but PetSmart ruled out a deal with Petco in 2014 in favor of a buyout by private equity consortium led by BC Partners Ltd. for US$8.7 billion. At the time, PetSmart was unsure a deal with Petco would receive antitrust clearance.
If PetSmart and Petco merged, the new company would account for 30% of US pet specialty supplies stores, reports say.
PetSmart and Petco account for 20% of all pet product sales in the US, according to market research publisher Packaged Facts. The two pet retail stores had combined sales of about US$11 billion in 2014 based on Packaged Facts' estimates, with sales of natural pet products an important factor in the strong performances.
In August 2015, Petco filed for an initial public offering of stock that could value it at US$5 billion to US$6 billion, including debt.
Exclusive: Petco begins merger talks with PetSmart - sources
The preliminary talks between the two private equity-owned companies come after PetSmart ruled out a deal with Petco last year in favor of a sale to a buyout consortium led by BC Partners Ltd for $8.7 billion, including debt.
