Tag Archives: PetSmart

Reading the M&A Tea Leaves

Few things can boost a company’s share price like a takeover bid.

Just ask PetSmart (NYSE: PETM) shareholders, who’ve watched the stock march higher since takeover speculation started swirling around the pet retailer five months ago.

The gains were capped by a 4.2% jump on Monday, after PetSmart agreed to an offer from private equity firm BC Partners. The $83.00-a-share bid represents a 39% premium over the stock’s closing price on July 2, the day before another private equity firm, Jana Partners, started leaning on PetSmart’s management to put up the “for sale” sign.

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PetSmart’s LBO Price Reveals Appeal of Unloved Stock: Real M&A

Shareholders (PETM) of a stock that no analysts have been recommending just got a great deal.

In a year that’s had the fewest U.S. leveraged buyouts since the financial crisis, PetSmart Inc. was able to clinch a transaction. BC Partners is taking the pet-supplies chain private in a deal valued at about $8.6 billion, or 9.2 times its earnings before interest, taxes, depreciation and amortization. That’s 16 percent higher than the median multiple in U.S. retail LBOs of the past five years, according to data compiled by Bloomberg.

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