U.S. private equity firm makes US$3.5 billion bet on pets with Zooplus

17 Aug

The Elevation Capital Global Shares Fund has held an investment in online European pet supplies retailer Zooplus since first acquiring shares on 5 August 2019 at Euro 117 per share.

On 13 August 2021, Zooplus announced it had accepted a takeover offer worth approximately Euros 3 billion (US$ 3.5 billion) from U.S. private equity firm Hellman & Friedman this equated to a price of Euro 390 per share - a 40.3% premium to the 12 August 2021 share price of Euro 278 per share.

Elevation Capital published two research reports on Zooplus, one in October 2019 and another in May 2020 focusing on the opportunity of e-commerce pet retail in Europe, likening the company to NYSE listed Chewy and highlighting Zooplus as a potential takeover target. We expected that Zooplus would trade at a slight discount to Chewy (on an Enterprise Value [EV] to Revenue basis of 2.8x), this takeover equates to a 1.5x EV/Revenue multiple which is in line with our forecasts.

The Elevation Capital Global Shares Fund actively manages its positions as detailed in the chart below which illustrates how we seek to add value for our investors when the market presents opportunities to add to positions on market weakness and then lower our cost base on subsequent strength all the while maintaining a core investment holding. Long-term investors in the Fund since we initiated an investment in Zooplus have realised a total return from Zooplus of +155.75% as at 17 August 2021 when we exited our entire investment.