PetSmart Inc. (Nasdaq: PETM) agreed to acquire Chewy Inc., one of the fastest-growing online pet supply stores.
The companies declined to comment on terms of the deal. Chewy said in November that it wasn’t profitable but expected to increase revenue to $1.5 billion this year. The company has raised more than $230 million from BlackRock, the venture capital arm of T. Rowe Price and other investors.
PetSmart is among the largest pet retailers in North America, with more than 1,500 stores. The company is owned by BC Partners LLP, a London private equity firm. Chewy was founded in 2011 and has attracted some 3 million customers.
Buyers have been showing strong interest in the pet care sector as the industry presents recurring costs for pet owners, and subsequently recurring revenues for businesses. Mars agreed to buy the animal-hospital chain VCA Inc. (Nasdaq: WOOF) for about $7.7 billion and Tractor Supply Co. (Nasdaq: TSCO) purchased pet food maker Petsense LLC. Tractor Supply CEO Gregory Sandfort won Mergers & Acquisitions' 2016 Dealmaker of the Year award for accelerating into the pet care sector.
Additional reporting by Mergers & Acquisitions' Demitri Diakantonis.