Blackstone Acquires Online Pet-Care Marketplace Rover for $2.3 Billion

According to Yahoo News, Blackstone Inc. has agreed to acquire Rover Group Inc., an online pet-care services marketplace, in an all-cash deal worth $2.3 billion. The pet economy experienced significant growth during the pandemic as Americans adopted more pets while in lockdown. However, pet owners are now facing increased expenses due to inflation affecting basic goods, including pet-care products. Blackstone will pay $11 per share for the dog-walking and pet-sitting company, a 61% premium on its average price in the 90 trading days leading up to the announcement. The deal is expected to close in the first quarter of 2024. Following the news, Rover's shares surged by up to 31% to $11.10, marking the largest increase on record. Rover, based in Seattle, went public in August 2021 through a merger with Nebula Caravel Acquisition Corp., a special purpose acquisition company sponsored by San Francisco-based True Wind Capital. The company was valued at approximately $1.35 billion at the time. As interest rates have risen, companies that merged with SPACs have become attractive buyout targets for cash-rich private equity firms seeking deals and eager to return capital to their limited partners. In other pet industry news, Petco Health & Wellness Co.'s shares dropped by up to 21% after reporting third-quarter sales and earnings that missed analysts' estimates. The company is currently navigating a challenging consumer environment and undergoing an operational reset to better appeal to pet owners and manage costs more effectively. Goldman Sachs and Centerview Partners are serving as financial advisers for Rover, while Evercore and Moelis & Co. are advising Blackstone.