ORLANDO — Franchise Group Inc. announced plans to acquire Pet Supplies Plus for $700 million.
The group (NASDAQ: FRG) is buying Pet Supplies Plus, a retail chain and franchisor of pet supplies and services, from affiliates of Sentinel Capital Partners in an all-cash transaction. The deal is expected to close in March.
Founded more than 30 years ago, Pet Supplies Plus is “a mature and rapidly growing pet industry franchisor with a footprint of more than 500 locations, of which almost 60 percent are franchised,” according to a press release announcing the acquisition. It’s described as “the leading franchisor in the pet industry, with superior unit economics and a turnkey franchise system driving a backlog of more than 185 new stores in various stages of development nationwide.”
“We look forward to welcoming Pet Supplies Plus, its management team, employees, franchisees and neighbors to Franchise Group when this Transaction closes,” said Brian Kahn, president and CEO of Franchise Group. “PSP adds another franchise concept with strong unit economics, diversification into an economically resilient and secularly growing pet industry, and a brand that has and will continue to experience robust unit expansion from its franchise system. The additional scale and diversification that PSP will afford Franchise Group is expected to immediately lead to lower costs of capital and expanded free cash flow generation. We look forward to partnering with PSP’s outstanding and long tenured management team to accelerate their already ambitious expansion plans while leveraging Franchise Group’s best practice functions to drive incremental efficiencies.”
Franchise Group’s other business lines include Liberty Tax Service, Buddy’s Home Furnishings, American Freight and The Vitamin Shoppe.