PetSmart has agreed to acquire Chewy, an online retailer of pet food and other animal products, with Recode reporting a price of $3.35 billion. Founded in 2011, Chewy is one of the major up-and-comers in the ecommerce sector, as the size of the acquisition reflects: It’s perhaps the biggest price tag yet for an online retail business, surpassing Walmart's $3.3 billion takeover of Jet finalized last September.
The deal will add Chewy’s expansive online presence—CEO Ryan Cohen has said the company had revenue of $900 million in 2016 and is targeting $2 billion this year—to PetSmart’s existing brick-and-mortar operations, which span more than 1,500 stores in North America. PetSmart has been backed by private equity since 2015, when a consortium led by BC Partners and including Caisse de dépôt et placement du Québec, StepStone Group and Longview Asset Management bought the business for $8.7 billion.
The Chewy deal continues a recent trend of multibillion-dollar add-ons: Of the 28 add-ons to equal or top the $2 billion mark since the start of 2011, 13 occurred in 2015 or 2016, per the PitchBook Platform.