Saturday, July 15, 2006

Petco Turns Private

Petco Animal Supplies (NASDAQ:PETC) will be acquired by two private equity firms for $1.68 billion. Leonard Green & Partners, L.P. and the Texas Pacific Group, who previously took the company private from 2000 to 2002, have agreed to do it again, adding Petco to their portfolios of investments.

Removing analyst pressures and vagaries of public sentiment seems to me a wise strategic move at this juncture, allowing the company to better focus on its strengths and dynamically adjust the business in the market. A low stock price and emerging indications of new consumer behaviors may be two factors involved in the decision.

Read more:

PETCO Animal Supplies, Inc. to be Acquired by Texas Pacific Group and Leonard Green & Partners, L.P. for $29.00 per Share in Cash, Petco Animal Supplies, Inc., July 14, 2006.

Petco Agrees to $1.68B Buyout by Group , by Elliot Spagat, The Associated Press, July 14, 2006.

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