Petco Animal Supplies Inc., a pet products retailer backed by backed by private equity firms Leonard Green & Partners LP and TPG Capital LP, has agreed to acquire Foster and Smith Inc., which does business as Drs. Foster & Smith.
Terms of the transaction, announced Wednesday were not disclosed. The deal is expected to close in early 2015. The acquisition will include the Rhinelander, Wis.-based hybrid catalogue and e-commerce business's Tprescription services and its popular branded products.
The Deal last month reported that Drs. Foster & Smith was on the auction block. A source familiar with the situation said at the time that the target generated $250 million in annual revenue and is profitable.
Drs. Foster & Smith's generates half of its annual revenue online, while the other half is rooted in its catalogue business. The company is a purveyor of pet food and treats, pet bedding, cages and crates, toys and grooming products. It was founded in 1983 by veterinarians Dr. Rory Foster, Dr. Race Foster and Dr. Marty Smith, initially consisting of a group of four veterinary clinics. It then expanded into selling products via catalogue, and then online. In 2003, the company added an online full-service pharmacy through which customers could order prescriptions for their pets and have their purchase mailed.
The pet food and health market has been active over the last few months, with valuations continuing to rise as consumers increasingly spend on healthy lifestyles for their pets.
Earlier this week, Zoetis Inc. (ZTS) purchased the assets of Abbott Laboratories' (ABT) animal health business in a deal valued at $255 million. Zoetis — which was spun out of Pfizer Inc. (PFE) in February 2013 — is an animal health company that provides diagnostic tests, vaccines and other pharmaceutical products for both companion and farm animals.