PetSmart has agreed to make the biggest e-commerce acquisition in history, putting a deal in place to snatch up fast-growing pet food and product site Chewy.com for $3.35 billion, according to multiple sources familiar with the deal.
The deal is a huge one by any standard — bigger than Walmart’s $3.3 billion deal for Jet.com last year — and especially for a retail company like PetSmart, which was itself valued at only $8.7 billion when private equity investors took it over in 2015.
But Chewy.com has been one of the fastest-growing e-commerce sites on the planet, registering nearly $900 million in revenue last year, in what was only its fifth year in operation. The company had been a potential IPO candidate for this year or next, but was taken out by its brick-and-mortar competitor before that. It was not profitable last year.
Chewy was founded in 2011 by Ryan Cohen and Michael Day, and built a cult following for its excellent customer service, large selection and fast shipping. It had quietly raised at least $236 million in venture capital from investors including Volition Capital, T. Rowe Price and BlackRock.
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