(Bloomberg) -- Hellman & Friedman and EQT AB teamed up on a joint 3.7 billion euro ($4.3 billion) offer for Zooplus AG, ending a takeover battle between the private equity companies for the German online pet-food retailer.
Hellman & Friedman said it raised its offer to 480 euros a share in cash from 470 euros, and EQT will be an equal partner in the bid. Zooplus’s management and supervisory boards support the bid and recommend shareholders accept it before it expires on Nov. 3.
The bidders had been in a standoff over Zooplus. Earlier this month, Hellmann & Friedman matched EQT’s 470 euro per share offer. The stock rose 0.3% to 477 euros at 9 a.m. in Frankfurt.
Private equity firms have been using their vast sums of capital to hunt for acquisitions in the post-pandemic world, in part because of an abundance of cheap credit. The takeover of Zooplus marks the second take-private deal in Germany this year following a buyout binge in the U.K.
The pet-care market was booming even before Covid-19 as owners increasingly bought more premium products and turned to convenient online deliveries. Then as the pandemic took hold, people stuck at home sought out furry companions, pushing adoptions and fostering to record highs. Though a return to normality could slow the trend, the increase in flexible work arrangements post-Covid may mean people continue to buy pets.
Hellman & Friedman, led by Patrick Healy, raised one of the biggest-ever buyout funds with $24.4 billion in July. Alternative asset manager EQT has become one of the most-active European private-equity houses working on some of the biggest buyouts on the continent in recent years including Nestle Skin Health.
Low rates and high returns have prompted limited partners -- pension funds, insurers -- to allocate more money to private equity in search of yield, spurring the most buyout-led acquisitions in Europe in the first half of the year in over a decade. The pet-care market has surged in the last two years as stay-at-home workers adopt furry friends, according to figures from Euromonitor.
Euromonitor predicts 7% growth in the global pet-care market through 2026 as online transactions boost sales. The industry was already benefiting as dog and cat owners looked for more premium products and the convenience of online deliveries.
EQT has done deals in the pet industry before, building up a chain of veterinary care practices under the IVC Evidensia moniker.
(Updates with background starting in sixth paragraph)
©2021 Bloomberg L.P.