Hellman & Friedman has offered to buy Zooplus AG, a German online retailer of pet supplies, for about 2.8 billion euros ($3.3 billion) as the private equity firm tries to snap up a company that has been among the big lockdown winners.
The bid of 390 euros per share in cash, which is backed by Zooplus’s management and supervisory boards, implies a 40% premium over the company’s Aug. 12 closing price.
The pet-care market was booming even before Covid-19 as owners increasingly bought more premium products and turned to convenient online deliveries. Then as the pandemic took hold, people stuck at home sought out furry companions, pushing adoptions and fostering to record highs. Though a return to normality could slow the trend, the increase in flexible work arrangements post-Covid may mean people continue to buy pets.
The market has been thriving globally. Nestle SA, which owns the Purina brand, saw pet food sales surge at the fastest rate in more than a decade last year. The company has a majority stake in the U.K.’s Tails.com, a direct-to-consumer dog nutrition business, a move made in 2018. Pets at Home Group Plc said last month it expects full-year earnings to be at the top end of analyst expectations. And JAB is said to be weighing an initial public offering of its pet-care portfolio.
Private equity firms have been using their vast sums of capital to hunt for acquisitions in the post-pandemic world, in part because of an abundance of cheap credit. The takeover of Zooplus marks the second take-private deal in Germany this year following a buyout binge in the U.K. The Carlyle Group made an offer last week to buy Schaltbau Holding AG, a technology supplier for rail infrastructure, for about 584 million euros.
Private equity announced a record $9 billion in deals for German-listed companies in 2020, according to data compiled by Bloomberg.
Hellman & Friedman last month raised one of the biggest-ever pools of private equity capital, after investors committed $24.4 billion to its latest flagship fund. The firm’s involvement in acquisitions this year included a mammoth bid to buy medical supply company Medline Industries Inc. It’s also been behind some of the most high-profile deals in European financial services in recent years.
The offer will be subject to conditions including reaching a minimum acceptance threshold of 50% plus one share, according to a statement from Hellman & Friedman vehicle Zorro Bidco.