Private-equity firm CVC Capital Partners and Canada Pension Plan Investment Board (CPPIB) are nearing a deal to acquire Petco, valuing it at around $4.7 billion, including debt, according to people familiar with the matter.
CVC's and CPPIB's consortium outbid other buyout firms in an auction for Petco and is now finalizing terms with the U.S. pet retailer's owners, private equity firms TPG Capital LP and Leonard Green & Partners LP, the people said on Sunday.
The sources cautioned that the deal had not yet been finalized and asked not to be identified because the negotiations are confidential. TPG and CVC declined to comment, while Petco, CPPIB and Leonard Green did not immediately respond to requests for comment.
The deal comes at a challenging time for private equity firms because choppy leveraged finance markets have made it more difficult for them to secure the amount of debt that they are accustomed to in order to juice higher investment returns.