- Hellman Friedman offered to buy Zooplus AG, an online retailer of pet supplies, for about 2.8 billion euros as the private equity firm tries to snap up a company that has been among the big lockdown winners.
The bid of 390 euros per share in cash, which is backed by Zooplus Management and Supervisory Boards, implies a 40% premium over the company's Aug 12 close price.
On Friday, Zooplus shares surged as much as 43% in German trading. They were already up 64% in 2021 at the close of Thursday after doubling their value this year, after the latest move to stock market.
The pet-care market was in booming business even before Covid - 19 as owners bought more convenient products and turned to premium online deliveries. So the pandemic seemed to happen as the people trapped at home sought out furry companions, pushing adoptions and fostering to record highs. Though a return to normality could slow the trend, the increase in flexible working arrangements post-Covid may mean people can continue to buy pets.
The market has been thriving globally. Nestle SA, which owns Purina brand, saw pet food sales surge at the fastest rate in over a decade last year. Pets at Home Group Plc said last month it expects full-year earnings to meet analyst expectations. And JAB is said to be weighing an initial public offering of its pet-care portfolio.
Private equity firms have used their vast amounts of capital to hunt for acquisitions in the post-pandemic world, in part because of an abundance of cheap credit. The takeover of Zooplus marks the second take-private deal in the U.K. in 2013 following a Buyout Binge in Germany. According to Bloomberg, private equity announced a record $9 billion in deals for German-listed companies in 2020 according to data compiled by Bloomberg.
Hellman Friedman last month raised one of the largest funds in private equity after investors committed $24.4 billion to its latest flagship fund. The firm's participation in acquisitions this year included a gigantic bid by Medline Industries Inc. to buy medical supply company Medline Industries Inc. It has also been involved in some of the most high-profile deals in European banking services in recent years.
The offer will be subject to conditions including reaching a minimum acceptance threshold of 50% plus one share, according to a statement from Zorro Bidco vehicle Hellman Friedman.