PetSmart pays a handsome sum for Pet360
September 17, 2014 10:20 AM
Details are emerging on how much PetSmart Inc. is paying to acquire online retailer Pet360.
In its second quarter earnings report recently filed with the U.S. Securities and Exchange Commission, PetSmart, No. 362 in the 2014 Internet Retailer Top 500, revealed it is purchasing Pet360 for $130 million with the possibility of additional performance-based payments totaling up to $30 million by the end of 2016.
In the filing PetSmart also says it is paying cash for the acquisition and expects the deal to close by end of September.
PetSmart announced it was acquiring Pet360 in August. Pet360 operates several sites selling various kinds of pet supplies and has an advanced e-commerce technology platform and pet-related content, PetSmart says.
The Pet360 network is composed of at least nine pet supplies e-commerce sites and serves more than 12 million pet owners each month, PetSmart says. Pet360, based in Philadelphia, also operates PetMD.com, an information site for pet health information and PetFoodDirect.com, which sells pet food, medications and supplies. Pet360 also operates BlogPaws, a platform for pet bloggers and social media enthusiasts.
“This transaction is a smart and efficient way to make PetSmart a leader in the online retail space,” PetSmart CEO David Lenhardt told analysts on the company’s year-end earnings call. “Although online sales are still a relatively small part of the pet products industry, we expect them to become a more relevant source of revenue in the future.”
PetSmart will run Pet360 as a separate business for now but will begin to leverage aspects of the company’s e-commerce technology on PetSmart.com. “Pet360 is more than just pure e-commerce,” Lenhardt said. “This brings us capability and talent from a personalization perspective and they bring an established prescription pharmacy operation to us and in-house digital media team, as well as significant online and technology experience.”
At the same time PetSmart is completing its deal to acquire Pet360, the company also continues to analyze other strategic initiatives, including a possible sale of the company. PetSmart hasn’t made any recent public announcements on a possible sale.