(Reuters) - Petco Holdings Inc agreed to be acquired by CVC Capital Partners Ltd and the Canada Pension Plan Investment Board (CPPIB) in a $4.6 billion (£3 billion) deal, after merger talks with market leader PetSmart Inc (O:PETM) stalled last month due to antitrust concerns.
Petco, the No.2 U.S. pet supplies retailer, had been put up for sale by a group of investors led by private equity firms TPG Capital LP and Leonard Green & Partners LP, the company said on Monday.
TPG Capital and Leonard Green bought Petco for the second time when it was a public company in 2006 in a $1.7 billion deal. The two buyout firms had also taken the company private in 2000 for $600 million, and then took it public again in 2002.
TPG and Leonard Green had been hoping to sell the company for more than $5 billion, including debt, sources told Reuters in October.
Based in San Diego, California, Petco was founded as a mail-order company in 1965 and currently operates more than 1,400 stores in the United States, Mexico and Puerto Rico. It had sales of about $4 billion in the year to Jan 31.
CVC and CPPIB have secured more than $3 billion in debt financing for the acquisition, Reuters reported on Sunday, citing people familiar with the matter.
Barclays, Citigroup (N:C), Royal Bank of Canada, Credit Suisse (VX:CSGN), Nomura and Macquarie have provided committed debt financing to CVC and CPPIB, the companies said on Monday.
Goldman, Sachs & Co and JP Morgan Securities LLC are financial advisers to Petco, while Ropes & Gray acted as its legal counsel.
Barclays, Citigroup and Moelis advised CVC and CPPIB, while Gibson Dunn provided legal advice.