PetSmart has announced a deal to acquire Chewy.com, in a move that brings together the largest physical and online retailers of pet supplies in the US.
No financial details of the deal were disclosed, by the Recode site has cited unnamed sources to value it at $3.35bn. If confirmed, this would become the biggest online acquisition in history, overtaking Walmart’s $3.3bn buyout of Jet.com last year.
The acquisition, which is subject to regulatory approvals, is expected to be completed in summer 2017. Following this, Chewy.com will operate as an independent subsidiary of PetSmart, focusing on its existing business strategy, while PetSmart will execute its strategic initiatives across the combined company
Chewy was founded in 2011, and has seen its sales skyrocket from $26m that year to more than $900m in 2016, a number that is expected to grow to $2bn in 2017. The company has an estimated 51% share of the US online pet food market, including 40.5% in direct sales and 10.2% in subscription sales. The company has more than 2 million customers and employs 5,000 staff.
PetSmart, which operates more than 1,500 stores across the US, noted: “Chewy’s high-touch customer e-commerce service model and culture centred around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings”.
Chewy added: “Combining our strong e-commerce expertise with PetSmart’s best-in-class infrastructure, footprint and breadth of offerings including services will help us wow our customers even more.”