PetSmart, Inc. (NASDAQ:PETM)is about to get a new owner in what is being considered to be the biggest private equity deals o 2014. The pet products retailer is being acquired for $8.2 billion. The shareholders for PetSmart, Inc. (NASDAQ:PETM) are expected to receive a total of $83 per share which is being seen as a huge positive for the investors of the company by the analyst community on the street. A group of investors led by BC Partners and Longview Asset Management which has 9 percent stake in the company banded together a group to make this deal happen.
Activist investors had been pushing for a change in the company as the sales of the company had been deteriorating over the last few quarters as the company had been facing massive competition from online giants like Amazon and other e-commerce companies. The market share for the company had been deteriorating and activist investors believed that the management has been unable to steer the company in the right direction. The stock for the company had come under massive selling pressure post the dismal first quarter earnings. Hedge fund Jana Partners had disclosed a 9.8 stake in the company and had pushed the management to seek a sale. The company in August had stated that it was looking for strategic options” for itself which the street believed was the management pointing towards a sale in the near future.
The company in a released statement said that it was pleased to reach a deal with BC Partners and believe that the sale would be able to unlock shareholder value. The company said that the sale is in line with the management extensively reviewing all its strategic options. The board for PetSmart, Inc. (NASDAQ:PETM) has unanimously approved the sale. Longview Asset Management in a statement said that it would support the sale and believes that the decision would provide immediate value to its shareholders and position the company well for the future. If all approvals for the deal are received from the regulatory bodies and shareholders, the deal should close by the first half of next year.