NEW YORK (TheStreet) -- Shares of PetSmart (PETM) are up 3.06% to $75.87 in pre-market trade after it was reported that buyout firms KKR & Co. (KKR) and Clayton, Dubilier & Rice have teamed up to take the company private for more than $7.5 billion, sources told Reuters, as the auction for the pet food retailer heats up.
KKR and CD&R are planning to submit a joint bid for PetSmart next month, sources added. Apollo Global Management (APO) and BC Partners are also separately considering offers, sources told Reuters.
A deal for PetSmart would represent the biggest leveraged buyout of the year. KKR's and CD&R's collaboration underscores the big size of the equity check involved in the deal, Reuters noted.
TheStreet Ratings team rates PETSMART INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETSMART INC (PETM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."