City Farmers sells for $205m
WA-based pet products chain City Farmers has been sold to the company behind Petbarn stores as part of a cash and scrip deal worth $205 million.
Queensland-based, ASX-listed Greencross is purchasing the business from majority owners Quadrant Private Equity and a group of investors headed by former iiNet chief financial officer Clayton Hollingsworth.
City Farmers was established in 1991 and had 10 stores in WA when Mr Hollingsworth and a group of investors bought the business in 2008.
Since then, the business has grown into an Australia-wide chain comprising 42 stores nationally, 21 of which are in WA.
Mr Hollingsworth sold a majority stake in the business to Quadrant Private Equity for $93 million in August last year.
The company has enjoyed strong growth in recent years with animal lovers generally spending more on their pets' food, health, entertainment and grooming.
City Farmers is forecast to deliver annualised revenue of about $120 million and annualised EBITDA of about $20 million in full-year 2015.
Greencross will fund the acquisition through $50 million in new shares issued to the vendors, a $51 million rights issue, a $69 million placement and $45 million in debt.
Greencross said the acquisition would increase its WA presence from five stores to 26 stores, with opportunities to expand its co-located vet network in City Farmers stores.
Following completion of the acquisition, Greencross will operate 285 locations across Australia and New Zealand, comprising 177 stores and 108 clinics.
Greencross chief executive Jeff David said the combination of Greencross and City Farmers brought together two of Australia's outstanding pet specialists and increased the company's exposure in the WA market.
"The transaction underscores our commitment to becoming the leader in the rapidly growing pet care market," he said.
Greencross is Australia’s largest integrated pet care retailer and veterinary practices chain with 108 clinics and 135 retail stores across Australia and New Zealand.
Greencross shares last changed hands for $9.12.
