Australian supermarket chain Woolworths Group Ltd has announced plans to acquire a 55% stake in pet food and services retailer Petspiration Group for A$586 million (€375.3 million) in cash.
Petspiration is the owner and operator of retail brand PETstock, and has a network of 276 stores across Australia and New Zealand. The company has an enterprise value of about A$1.7 billion (€1.09 billion).
Specialty Pet Segment
"Specialty pet is a large and growing retail segment in which we have limited presence," Woolworths Group CEO Brad Banducci said. He added the company was confident of a "strong" return on the investment for its shareholders.
"The partnership will allow us to meet more of our customers’ pet family needs with a complementary range of specialty pet
products and services, strengthen the Everyday Rewards loyalty program and unlock opportunities for material value creation across both businesses," he added.
Endeavour Group Stake Sale
Woolworths said it will fund the Petspiration deal with proceeds raised from a recent 5.5% stake sale in alcohol retailer Endeavour Group.
The grocer has been looking for newer avenues since growth in grocery shopping has slowed as people return to eating in cafes and restaurants, while surging inflation and cost pressure dent its bottomline.
Woolworths earlier this year bought an 80% stake in online retailer MyDeal.com, but scrapped its bid for drugstore chain Australian Pharmaceutical Industries, saying it was unable to validate the financial returns of the deal.
The Petspiration deal, which is subject to certain regulatory approvals, is expected to complete in mid 2023.
News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.