Business

PetSmart bought by private investors for $8.7bn

petsmart Image copyright Petsmart

US pet products retailer PetSmart has been sold to a group of private investors for $8.7bn (£5.5bn), in the largest debt-funded deal of the year.

BC Partners will pay $83 per share, significantly higher than Friday's closing price of $77.67.

Jana Partners, a so-called "activist" fund, bought a stake in the company earlier this year, and began pushing for a sale in the summer.

Jana paid less than $55 per share on average for its stake in PetSmart.

PetSmart, which has approximately 54,000 employees and 1,387 stores, told investors in August that it would investigate a potential sale.

The firm faces fierce competition from large retailers, including Wal-Mart and Amazon. Last month, it reported third-quarter net income of $92.2m and a sales rise of 2.6% to $1.7bn.

Private equity firms often buy a company with a view to improving its profitability and then selling it.

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