Petco pet supplies chain to be sold for $4.6 billion

Private equity owners reach deal with CVC Capital and Canadian Pension Plan board.

The private equity owners of Petco Animal Supplies have reached a $4.6-billion deal to sell the retailer to CVC Capital Partners and the Canadian Pension Plan Investment Board, Petco officials announced Monday.

Petco has been owned by TPG Capital and Leonard Green & Partners since it was taken private in 2006 in a $1.8-billion debt-leveraged buyout. CVC is a private equity group.

In August, Petco told the U.S. Securities and Exchange Commission it was considering an initial public offering. The company reported net income of $75 million in its latest fiscal year on revenue of $4 billion. It said profits had declined over the last two years, but improved over the first half of the current fiscal year.

“We are very excited to partner with CVC and CPPIB to further drive our strategic goal of being the trusted partner of choice for pet parents,” James M. Myers, Petco’s chief executive, said in a statement.

Petco, which employs about 650 workers at its Rancho Bernardo headquarters, was founded 50 years ago in San Diego as a mail-order veterinary supply company. Its first store was in La Mesa.

The company sells pets, pet food, supplies and services at 1,400 locations across the United States and Mexico. A Petco spokeswoman said the firm plans to keep its headquarters in San Diego.

In 2004, the company agreed to pay the San Diego Padres about $60 million over 22 years for naming rights to Petco Park, the city’s downtown Major League Baseball stadium, making it one of the most expensive such marketing deals for a baseball park at the time.

Last month, concern about antitrust enforcement reportedly scuttled merger talks between Petco and PetSmart, a larger competitor. PetSmart was bought in March for $8.7 billion by a group of investors led by BC Partners.