PetSmart announced on Sunday that it has agreed to be acquired by BC Partners. Here’s what the deal means for mutual fund investors.
Inside the Deal
Investors led by BC Partners have agreed to purchase PetSmart (PETM) for $8.7 billion, or $83 per share. This announcement comes almost four months after PETM announced that it was exploring the possibility of a sale.
This deal marks the largest private equity deal announced in 2014. Since the announcement of a possible sale, PETM’s share price has risen nearly 40%. The deal is expected to close in the first half of 2015.
Deals Continue
Private equity has been targeting the retail space over the past few years, and many of these deals have resulted in the repackaging of companies for future IPOs. If the PetSmart deal follows this trend, investors can expect to see another IPO in the next couple of years.
Mutual Funds to Watch
Investors interested in gaining exposure to PETM may also consider one of the funds listed below. The funds below currently own the largest stakes in PETM.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| OWSMX | Old Westbury Small & Mid Cap | 1.84% |
| VMCIX | Vanguard Mid Cap Index | 1.74% |
| VTSMX | Vanguard Total Stock Market Index | 1.05% |
The Bottom Line
The funds above are a great way for investors to gain exposure to PETM while still remaining diversified. Investors interested in PETM may also be interested in VCA Inc (WOOF).
Shares of PETM are up 11% YTD.