Petz (PETZ3) announced this Wednesday (26) that it has signed, with Selected Participações (Holding Petix), a contract for the acquisition of 100% of the shares issued by Holding Petix and, indirectly, of all the shares or quotas, of its subsidiaries Petix Company LLC and Petix Indústria, of sanitary mats.
Within the scope of the Transaction, Petix was valued at R$ 70 million in company value (Enterprise Value). The amount is subject to the usual adjustments in this type of transaction to reflect the variation in net debt and working capital to be determined on the closing date of the transaction.
In a day also of encouragement for retailers, the action of Petz has a strong rise on the Ibovespa, with gains of 8.10%, at R$ 18.14, at 11:25 am (Brasília time).
The transaction will be carried out through the incorporation, by Petz, of shares representing 51.00% of the shares issued by Holding Petix, which will correspond to the amount of R$ 35,000,000.00 on the transaction’s effective date; and the acquisition, by the company, of shares representing 49.00% of the shares issued by Holding Petix, upon payment of R$ 24,860,935.00 on the closing date.
If Holding Petix achieves certain performance metrics, Petz may pay, as an additional price, to the current shareholders of Holding Petix, up to BRL 10 million divided into three installments related to the performance verified in the years 2023, 2024 and 2025.
The operation depends on regulatory approvals including that of the Administrative Council for Economic Defense (Cade).
According to Itaú BBA, the news is slightly positive. Analysts see the acquisition as a good way for the company to boost its private label initiatives, increasing its assortment and exploring potential efficiencies with Zee.dog, in addition to being an acquisition that can verticalize the production process. However, it sees the transaction size as not too large to impact the action. The asset recommendation is outperform (a performance above the market average), with a target price of BRL 16.78, or upside potential of 79%.
Bradesco BBI also has an outperform recommendation for the assets, but with a target price of R$ 25, configuring an upside potential of 49% compared to the previous day’s closing.
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“We see the acquisition as another positive step in the development of the Petz ecosystem, as it strengthens the company’s positioning in private label products. This strategy took a big step forward with the acquisition of Zee.Dog (announced in August 2021), and we see Petix as another incremental and complementary step on this path”, they assess.
They believe that sanitary mats are likely to be a high-growth category in the coming years, given the low penetration in around 10% of pet homes in Brazil, as well as large market share opportunities abroad, including the US ( where Petix is already present) and eventually Europe (where Petix can leverage Zee.Dog’s presence and relationships). Overall, he views the acquisition as positive for Petz, thus reiterating his buy-equivalent recommendation for the assets.
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