CVC Capital Partners and the Canadian Pension Plan Investment Board agreed to buy Petco Animal Supplies Inc. in a deal worth about $4.7 billion, people with knowledge of the matter said.
The two firms beat a joint offer from buyout firms KKR & Co. and Hellman & Friedman, as well as a bid by Apollo Global Management LLC, said the people, who asked not to be identified because the information is private. The deal may be announced as soon as this week.
The San Diego-based pet-supplies retailer was taken private by TPG Capital and Leonard Green & Partners in a $1.8 billion leveraged buyout in 2006. TPG invested $362 million of equity through two buyout funds, according to a confidential marketing document obtained by Bloomberg.
The Fort Worth, Texas-based private equity firm stands to reap about a 350 percent profit from the sale, including dividends paid by Petco in 2010 and 2012, a person familiar with the matter said. Leonard Green, whose stake is 20 percent smaller than TPG’s, will notch a comparable percentage return.
Petco hired advisers earlier this year to explore options including a sale or taking the company public, people familiar with the matter have said. The company filed in August with the U.S. Securities and Exchange for an initial public offering.
Spokesmen for TPG and CVC declined to comment, while representatives for CPPIB, Petco and Leonard Green didn’t respond to telephone requests seeking comment.
