Pet supplies retailer PetSmart Inc. (PETM) has agreed to acquire Chewy Inc., an online retailer of pet food and supplies.
Financial terms of the deal were not disclosed, but tech media site Recode valued the deal at $3.35 billion. The amount exceeds the $3.3 billion paid by Wal-Mart Stores Inc. (WMT) for Jet.com Inc. in August 2016.
PetSmart noted that Chewy's position in the growing, but under-penetrated online pet retail segment will complement its footprint in brick and mortar, with over 1,500 stores and 55,000 associates across North America.
Dania Beach, Florida-based Chewy was founded by Ryan Cohen and Michael Day in 2011. Chewy currently has more than 5,000 employees in their home office, Boston office and fulfillment centers in Pennsylvania, Indiana, Texas and Nevada. The company offers around 20,000 items for dogs, cats and other pets.
The acquisition is expected to close by the end of PetSmart's second fiscal quarter of 2017.
"Chewy's high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart's store footprint and diverse offerings. Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel," Michael Massey, president and chief executive officer of PetSmart.
Upon closing, Chewy will continue to be led by CEO Ryan Cohen and operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy. PetSmart will continue to execute its strategic initiatives across the combined company.
Both companies also share a common goal of dedicating significant time and resources to non-profit animal welfare organizations.
PetSmart's PetSmart Charities has facilitated more than 7 million adoptions since 1994, and the largest funder of animal welfare in North America. This organization is complementary to Chewy's philanthropic efforts, including the Chewy.com Rescue and Shelter Network.
PetSmart operates more than 1,500 pet stores in the United States, Canada and Puerto Rico, and more than 200 in-store PetSmart PetsHotel dog and cat boarding facilities.
by RTT Staff Writer
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