SYDNEY, AUSTRALIA: Woolworths Group has entered into an agreement to acquire a 55% equity interest in Petspiration Group, a leading Australian and New Zealand speciality pet food, accessories and services retailer for a cash consideration of $586 million.

Petspiration is the owner and operator of leading retail brand PETstock and has a network of 276 stores, established eCommerce platforms such as Pet.co.nz, a 2.4 million member Petspiration Group loyalty program, and a strong own brand range including brands such as Caribu and Glow.

Woolworths Group CEO, Brad Banducci, said: “Specialty pet is a large and growing retail segment in which we have limited presence. We are delighted to be investing alongside founders, Shane and David Young, in Petspiration, the number two player in the segment.

Specialty pet is a logical adjacency given the high penetration of pet ownership across Australia and New Zealand.

The partnership will allow us to meet more of our customers’ pet family needs with a complementary range of specialty pet products and services, strengthen the Everyday Rewards loyalty program and unlock opportunities for material value creation across both businesses.

“We will work together to support Petspiration’s growth through access to our retail capabilities in areas such as Digital and eCommerce, Supply Chain, Retail Media, Format and Network Development, and Advanced Analytics. We are confident that this investment will deliver a strong return on investment for Woolworths Group shareholders.”

Shane and David Young (and other existing shareholders) will retain a 45% equity investment in the business and continue as CEO and Managing Director respectively, running Petspiration as a stand-alone business within Woolworths Group, under a separate board and governance structure. Within Woolworths Group, Von Ingram, the newly appointed Managing Director of W Living, will assume responsibility for bringing the partnership to life and unlocking the value creation opportunities across the Group.

Woolworths Group will invest $586 million for its 55% equity stake in Petspiration. Assuming net debt (including leases) of approximately $670 million, this implies an enterprise value of approximately $1.7 billion.