CVC and CPPIB Outbid Others for a Possible Deal to Buy Petco for $4.7 Billion
People who have knowledge of the matter said on Sunday, CVC Capital Partners Ltd, the private equity firm and Canada Pension Plan Investment Board (CPPIB) are closing in a deal to buy Petco Holdings Inc, for approximately $4.7 billion which includes debt.
The consortium of CVC and CPPIB outbid the other firms during the auction for Petco Holdings. They are now finalizing the deals terms with the owners of the U. S. pet food retailer, TPG Capital LP and Leonard Green & Partners LP, both private equity firms.
However, the sources said the deal is not yet finalized and the negotiations are still on making matters confidential. TPG and CVC both declined to make any further comment. Petco, CPPIB and Leonard Green also did not give any immediate response or give any comment.
This likely deal comes at a time that proves challenging for private equity firms as the jerky finance markets have proved to be difficult for them to secure the amount of debt which they are used to make investment returns juicier.
It is not the first possibility that Petco explored, earlier it looked at a possibility of being taken over by its bigger rival PetSmart Inc. However talks did not progress as both sides could not reach an agreement over certain issues.
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