Private equity giant to buy Pets at Home

Pets at Home had been following a dual-track process of preparing for an initial public offering as well as talking to private equity firms, and so the deal could fuel speculation that other firms following a similar process - like fashion retailer New Look - might also end up being sold.

KKR, whose retail investments include health and beauty group Alliance Boots and toys chain Toys R Us, did not give a value for the deal.

A price tag of 955 million signals a handsome return for private equity firm Bridgepoint, which bought Pets at Home for about 230 million in 2004.

First round bids from four private equity groups had valued the 250-plus store chain at more than 800 million, sources close to the process had said.

Pets at Home made earnings before interest, tax, depreciation and amortisation of 70 million in the year ended March 2009 on sales of 404.2 million.

Nomura is acting as financial advisor to KKR, while Nomura, Calyon and KKR Capital Markets are arranging debt financing for the deal, with the help of Commerzbank.

Bridgepoint is being advised by Rothschild.