PetSmart has entered into a definitive agreement to acquire Chewy, Inc., an online pet food and products retailer. The acquisition, which is subject to customary regulatory approvals, is expected to close by the end of PetSmart’s second fiscal quarter of 2017.
Upon closing, Chewy will continue to be led by CEO Ryan Cohen and operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy, while PetSmart will continue to execute its strategic initiatives across the combined company.
“We are focused on improving our customers’ experience in-store and online as we continue to execute against our long-term strategic initiatives,” said Michael Massey, president and chief executive officer of PetSmart. “Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings. Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel.”
Chewy is one of the leading online pet food retailers and has seen significant growth since it was founded by Ryan Cohen and Michael Day in 2011. Chewy’s position in the growing, underpenetrated online pet retail segment complements PetSmart’s strong footprint in brick and mortar, with over 1,500 stores and 55,000 dedicated associates across North America. Chewy’s product selection and subscription model have attracted and retained a significant customer base that has contributed to the growth of customer purchasing pet food online.
“Combining our strong e-commerce expertise with PetSmart’s best-in-class infrastructure, footprint and breadth of offerings including services will help us ‘wow’ our customers even more,” said Ryan Cohen, co-founder and CEO of Chewy, in a press release.
Financial advisors to PetSmart on this transaction were Citi and Barclays, with Simpson Thacher & Bartlett LLP acting as its legal advisor. Citigroup Global Markets Inc. and Barclays also provided committed financing for the acquisition. Equity financing is being provided by PetSmart’s existing shareholders. Financial advisor to online pet food retailer Chewy on this transaction was Allen & Company, with Weil, Gotshal & Manges LLP acting as its legal advisor.
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