Pets at Home snapped up for nearly £1bn by KKR

Steve Dinneen
Follow Steve
PETS at Home was snapped up by private equity firm KKR yesterday in a deal worth an astonishing £955m.

The sum was well above the £800m being touted by analysts in the lead up to the acquisition.

KKR beat stiff competition from Apax Partners, Bain and TPG, who had all tabled offers in the second round of bidding.

The price is believed to include £230m in debt. It is a handsome return for previous owner Bridgepoint, which bought the company for £230m in 2004.

A source close to the deal said: “It was a very quick turn-around from when the offer was made – just over 24 hours – they obviously really wanted it. The value was much more than anyone had expected, but Pets at Home is a rare business. It has a long track record for growth and KKR obviously believe it has much more to go.” KKR has an aggressive expansion programme in line for Pets at Home.

It plans to open 20 stores a year until the portfolio has expanded from its current 252 stores to more than 400.

It wants to vastly increase the percentage of pet owners who shop in its stores from the current 30 per cent.

ROTHSCHILD was acting as Bridgepoint's financial adviser, with Alex Midgen heading up the team. Midgen recently advised Telereal on its acquisition of Trillium. He also advised on several capital raisings in real estate during 2009, including Grainger, Songbird Estates and Shaftesbury. In 2004 he advised Glenmorangie on its sale to LVMH. He was involved in selling MEPC to Hermes and GE Capital for £2bn in 2000, and Bryant Homes to Taylor Woodrow for £400m in 2001.

The Queens Park Rangers fan advised Elliott Bernerd in his acquisition of Chelsfield for £2bn in 2003, and Guy Hands's Permira in its £4.75bn acquisition Viterra. He acquired Canary Wharf for US diamond and property magnate Simon Glick for £5.5bn. Midgen was hired by Rothschild in 1994. He was promoted to head of UK real estate in 2004 and made a managing director. Later the same year he was made a partner at the firm. His mentor was Russell Eadey.

The 40-year-old sits on the board of Songbird as a non-executive director. He graduated with a first from the University of Manchester Institute of Science and Technology. Qualified as a chartered surveyor, he joined Rothschild, working as an M&A generalist. He is known for his wry sense of humour and his measured manner. Also working on the Bridgepoint account for Rothschild was Majid Ishaq. He won the 2008 Rainmaker award for most successful consumer and leisure deal originator in the UK private equity mid-market.

On KKR’s side of the deal, Nomura acted as financial adviser. Nomura, Calyon and KKR Capital Markets are arranging debt financing for the transaction and Commerzbank has joined the arranging group. Simpson Thacher & Bartlett is acting as legal adviser to KKR.