Potential PetSmart-Petco Merger Raises Concerns

Petco is currently exploring the possibility of being acquired by its biggest competitor, PetSmart. The two companies considered this merger last year, but the deal fell through as a result of antitrust concerns. A joint Petco-PetSmart would control roughly 30% of the U.S. specialty pet retail market, raising concerns of antitrust issues. Such issues could result in closure of many of the merged Company’s stores. Other analysts speculated that although synergies would be generated from the merger, the combined Company would have a huge amount of debt and such movement would not address more urgent issues such as increasing competition from online retail stores.

Read more here: http://www.cbsnews.com/news/a-petsmart-petco-merger-might-not-add-up/

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Pet Valu Expands US Reach

The major Canadian pet retail chain, Pet Valu, completed its acquisition of Ohio-based pet retailer Jack’s Pets for an undisclosed amount this month. Pet Valu plans to invest up to $4mm to renovate and convert the Jack’s locations to align with the Pet Valu brand, including self-serve dog-washing stations. This acquisition is a major step in the Company’s strategic Midwest expansion. Pet Valu plans to expand the Jack’s branches from 32 to 100 stores. The next cities targeted for locations include Cleveland, Toledo and Pittsburgh.

Read more here: http://www.bizjournals.com/dayton/news/2015/04/03/pet-valu-to-invest-4m-in-jack-s-pets-conversion.html

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Mud Bay Owners Exit with ESOP

Mud Bay, a boutique pet retailer focused on healthy and specialty pet products, announced that current owners will be selling the Company to its employees through an Employee Stock Ownership Plan (ESOP). This alternative exit strategy will allow current co-CEOs and siblings Lars and Marisa Wulff to transfer their equity shares to the Company’s 320 employees.

The prevalence of owner exits through ESOPs has grown over recent years, with benefits including capital gains tax deferral for sellers and improved employee performance through ownership incentive. For more information regarding ESOPs click here.

To read more about Mud Bay’s ESOP, click here.

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