Independently owned pet chain PetO is set to triple its revenue to $200 million following its acquisition of 41 retail stores and 25 vet clinics divested from PetStock and Woolworths’ investment deal.
Established by brothers Nick Greenhalgh and David Rowe in 2006, PetO is a family-owned and operated business that has become an established brand in Sydney.
The acquisition includes adding brands such as Best Friends, Our Vet, My Pet Warehouse, and Pet City.
PetO will absorb 25 vet clinics under the Our Vet brand, ensuring the continuation of specialised in-house services and products for pet owners in Queensland, Victoria, and NSW.
Regulatory hurdles and divestiture impact
In late 2022, Woolworths CEO Brad Banducci expanded into the fast-growing pets sector through the $586 million purchase of a 55 per cent stake in PetStock.
However, the deal faced challenges as The Australian Competition & Consumer Commission required the pet retailer to divest certain sites for approval.
The ACCC said it was considering PetStock’s proposed divestiture in connection with its previous acquisitions of Best Friends Pets, Pet City, Animal Tuckerbox, and Pet and Aquarium Warehouse in Eltham, Victoria.
The divestment was necessary to facilitate the approval of the Woolworths deal and gain the ACCC’s endorsement.
Many of the acquisitions were made by PetStock without notifying the ACCC, which raised significant competition concerns.
These came to light during the regulator’s review of Woolworths’ proposed acquisition of a 55 per cent interest in PetStock last year.
PetO has now stepped in to buy those divested pet and vet operations, following a court-enforced divestiture notice delivered by the ACCC to PetStock and Woolworths.
To reflect this divestiture, Woolworths’ purchase price of the 55 per cent stake in PetStock would be expected to be around $438 million, down from the initial price tag of $586 million.
PetO to take the lead in booming pet sector
PetO will grow from 17 NSW-based stores to 58 retail stores nationwide, bringing it an entirely new customer base in Victoria, Western Australia, Queensland, and Tasmania.
PetO’s co-founder, Nick Greenhalgh, said that the expansion came at the perfect time for PetO.
“Australia is right now experiencing record levels of pet ownership and increased demand for pet products,” he continued. “We couldn’t think of a more exciting time to expand across the country.”
He also retained existing staff from the acquired stores and created additional positions within a new support team, resulting in the growth of PetO’s team to 1000 staff.
The PetO deal is set to close on July 1, positioning it as a major player in the $10 billion pet sector alongside Petbarn (owned by TPG’s Greencross) and PetStock.
